Spending on Amex cards falls marginally to 25%

Premium credit card issuer American Express is witnessing a marginal slip in spending growth in the domestic market, but is not excessively worried about the same, a top executive has said. Spending growth rate has slowed down to 25 percent as against 27-28 percent earlier, which is in sync with the broader industry trend, its country chief executive Manoj Adlakha told PTI on Thursday.

The slowdown reflects the deepening crisis in the economy, driven primarily by falling consumption demand. The first quarter growth printed in at a six-year low of 5 percent and nobody is expecting higher numbers in the second quarter. The government has taken a host of measures to drive up consumption but without with much success.

"When I look at the industry, it was growing at 27-28 percent, and is still growing at about 25 percent. The 200 bps dip is due to various factors," Adlakha said, adding the numbers reflect the overall industry. Another factor is the high base effect last year, he noted. Without offering the absolute numbers, he claimed that Amex has "millions" of customers here and more than a third of them (37 percent) are millennials.

Welcoming digital payment acceptance infrastructure set up by the government as a huge runway for growth, he said sounded bullish about growth going forward pointing to the more than doubling of PoS terminals to 3.5 million in the last three years and the faster penetration of QR codes which has touched 6.5 million since the note-ban. "With so much of headroom to grow, I don't see the current slowdown is impacting us," he said.

Amex has also done a survey of spends in the country, which reveals that luxury buyers are preferring to spend more abroad (which has grown by 30 percent) rather than spending in the country as the growth rate here has been only 13 percent. Adlakha said it will be difficult to point out to specific reasons why this is happening, but said it could be because of the growing affluence..

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