Travellers Cheques Seen Gaining Ground

Demand for travellers cheques (TCs) is growing at a fast pace in India even with the advent of international credit cards.

The American Express Group has seen a 40 per cent growth rate in its TCs division in the country.

This is attributed to the fact that travellers prefer carrying a part of their travel money in the form of TCs other than cash or credit cards.

"The Indian market is one of the fastest growing economies, and has the fastest growing middle class with a high propensity to spend. We see a year-on-year growth rate of 40 per cent in the country. This growth is fuelled by the increase in the affluent class and their increasing travel, " said John Chia, vice-president and general manager, travellers cheques group, Japan/Pacific/Asia/ Australia American Express.

"The TC business is treated as a separate unit with separate payment and collection centres," said Rajan B Bhat, vice-president travellers cheque, Indian and area countries.

With an annual income of $24 billion to $25 billion, the American Express Travellers Cheques Group is looking at Asia Pacific to increase its market share.

American Express is targeting the outbound leisure and business travellers segment in the country.

Chia said, "there are an increasing number of outbound leisure and business travellers. Leisure travellers account for around 25 per cent of the total overseas traveller base, and are the second largest growing segment among Indian travellers."

Families prefer TCs, unlike credit cards as they would not want to get into credit limit situations. Also most of the travellers carry a bouquet of payment options like credit cards, TCs, cash and debit cards.

Amex has the highest market share in the Indian market. According to Chia, "we are larger than all the other issuers put together. India is among the fastest growing markets for travellers cheques".

According to market observers, Amex has more than 60 per cent market share in India. Though officials were not ready to disclose the sales of TCs in the country, they said the sales are a few thousand crores.

In the last one year, most of the credit card issuing banks have offered international credit cards.

Many travellers still opt for TCs as these offer safety, security and are perpetual, having no expiry date.

Also TCs are like cash as they are accepted even at shops. Moreover, in a case of a loss, they can be replaced within 2 business days.