American Express (Amex) has come out with a toll-free number for merchants accepting American Express credit cards in 50 cities.
"The new facility will allow merchants in these cities to get the authorisation to carry out a transaction free of cost," American Express director (establishment services group), India & area countries, Peter Raj Kapoor, told Business Standard.
Whenever a merchant does a transaction above a certain limit, he needs to take the authorisation of the bank.
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While in about two dozen cities, Amex has a local office which gives the authorisation, in the remaining 225 cities covered by it, the merchant has to make a long distance call every time he needs to get the authorisation. Now, in 50 of these cities, merchants need not make those long distance calls.
According to Kapoor, a merchant in any of these 50 cities would typically spend Rs 30-60 per call. Now, by calling the toll-free number, the merchant will save the extra cost.
Of course, by providing the toll-free number, the cost of the communication is now borne by Amex. Kapoor said the bank hopes to extend the service to 75 to 100 cities in the next three to six months.
"Ever since the introduction of this service a few weeks back, we have seen a spurt in transactions," Kapoor said.
He said Amex's credit card business is growing at the rate of 35 per cent per annum as against the industry average of 25 per cent, while its billings are growing at an annual rate of 30 per cent compared with the industry average of 20 per cent. Amex operates its own proprietary network of outlets where its card is accepted.
In yet another service to its merchants, Amex is planning to tie up with other banks to provide them local billing and payment services.
At the moment, Amex has a tie-up with Vysya Bank in 40 cities. Merchants in these cities send their bills and receive payments from a local branch of Vysya Bank on behalf of Amex.
This helps the merchants in these cities get their payments faster besides saving them the cost of couriering their bills to one of the main offices of Amex.
According to Kapoor, Amex is looking at more such tie-ups with other banks to provide the same service to merchants in other cities.