The company is partnering online travel portal MakeMyTrip and Payback, the largest coalition loyalty programme in the country, to introduce a co-branded card to capitalise on the growing popularity of online travel booking. American Express had entered the mid-income segment in India when it launched a co-branded card with Payback in June 2013.
“We introduce new cards keeping in mind the interest of our target customers. At American Express, we found that 30 per cent of our total spend across categories is done online, of which nearly 50 per cent is for online travel booking. We wanted to seize this opportunity. Hence, we are introducing this new card, which has exciting travel related privileges,” Manoj Adlakha, chief executive officer at American Express Banking Corp, told Business Standard.
Industry analysts claim that online travel now accounts for 71 per cent of the country’s Rs 63,000 crore e-commerce market. It has grown at a compound annual growth rate (CAGR) of 32 per cent between 2009 and 2013. The growth is fuelled by India’s 213 million strong internet population – as on 2013 – which is seeing five million additions every month, driven by the rapid growth in the number of smartphone users.
American Express aims to target frequent travellers with annual income of Rs 6 lakh or more with its new card. While the annual fee for most American Express cards in India is between Rs 4,500 and Rs 50,000, the first year annual fee for American Express MakeMyTrip Credit Card has been kept at Rs 750. From second year the fee is Rs 1,500.
“We decided to put a very low entry barrier as we did not want to make this product unaffordable for our target customers,” Adlakha said.
Card members will get MakeMyTrip vouchers worth Rs 9,000, which can be redeemed across flights, hotels and holiday offers on the online travel portal. The card also offers five per cent cash back on MakeMyTrip bookings, and additional vouchers of Rs 2,000 and Rs 5,000 on spending Rs 1.25 lakh and Rs 2.5 lakh in a year, respectively. Card members will also earn up to five Payback points for every Rs 100 spent on all bookings at MakeMyTrip, two points for every Rs 100 spent elsewhere, and multiple Payback points from over 50 partner brands.
American Express had 659,650 credit cards in India at the end of June, 2014, the Reserve Bank of India (RBI) latest data showed.