American Express is increasingly targeting smaller outlets across the region. It is also using the acquiring network of regional banks to sign up merchants on its behalf. Kara Sensoli from MONEYworks reports.
American Express is currently working to extend its reach to a greater number of merchants throughout the region, encouraging them to accept the American Express card within their outlets. This objective follows a growing demand from customers wanting to use their cards for the more ordinary purchases they make on a daily basis.
According to Peter Fawn, director of establishment services for the Middle East and North Africa, American Express has placed increasing emphasis on targeting smaller outlets throughout the region, including supermarkets, department stores, local restaurants and small retail shops.
"We have to react positively to our card members, so if they're saying that they want to use their cards within these particular establishments, then we will do everything in our power to ensure that they actually have that flexibility to use the card whenever they want to," said Fawn.
Fawn also said his team has put more sales effort into building up the local merchant base by working closely with banks in the region such as the National Bank of Bahrain and the Bank of Bahrain and Kuwait, with whom they have had long-standing relationships. American Express is also connected to most of the major acquirers in the region, four of which are in the UAE.
American Express is not only hooking up with bank acquirers to deploy electronic point of sale machines into merchants, but is also getting the banks to sign merchants on its behalf to accept the American Express card. According to Fawn, this has allowed scores more salespeople to go into the marketplace and identify those merchants who have previously not been accepting the card.
While most acquisition before was done by the American Express staff itself, Fawn said that working with banks hand-in-hand has helped American Express grow its network more quickly and reach a more expansive merchant base. Over the last few years, the merchant base has grown well over 100 per cent across the region, while the number of transactions has also increased.
"We're surprised just how fast this business is growing, because it always exceeds our expectations. In particular, the UAE is the real growth area, but across the region, we're seeing better than expected numbers coming in every month," Fawn said.
Although American Express is building up its local merchant base, Fawn emphasised that it is not placing any less importance on its corporate and charge card business. Card acceptance in the traditional travel and entertainment industries has been strong across the region for many years and will continue to be a high priority for American Express.
In other advancements, American Express has also been working to improve the authorisation system it has within the region, looking closely at response times as well as at general maintenance of the system.
"We were not satisfied that we were providing the best to our merchants, and so we've invested huge amounts of money in a state of the art system now that enables transactions to come through literally within two to three seconds back to the terminal," Fawn disclosed.
Since the majority of transactions in the region are carried out electronically, this new technology is a big improvement and has, according to Fawn, sparked positive reactions from both merchants and card members.
Fawn also said that American Express plans on expanding the portfolio of products it has here in the region. Last year, American Express introduced its Gold credit card, while its Dubai Duty Free card was re-launched at the beginning of this year. Both cards, Fawn revealed, have done incredibly well across the region.
When asked about competitor cards, Fawn stressed that the competitor for American Express is not Visa or MasterCard, but rather the high volume of cash that is still being used across the region. An enlarged merchant base will likely encourage more customers to use their cards instead of cash in local establishments.
"The more people are used to carrying and utilising plastic for all their purchases, no matter how small they are, then that can only benefit all of the acquirers, and it's better for the consumer as well," said Fawn.
© UAE MONEYworks 2007
