AmEx targets China, India, for growth

American Express Co is eyeing China and India as it expands beyond traditional credit card lending, the executive leading that expansion told Reuters. "We're spending a lot of time in India and China thinking about various approaches," Daniel Schulman, head of the credit card company's enterprise growth unit, said in an interview here on Wednesday evening.
Those two countries are "vibrant, growing economies, but charge and credit is an almost infinitesimally small part of payment capabilities there," he said.
Most people in those and other emerging economies still use cash - or even their phones - instead of swiping credit and debit cards at the checkout.
American Express is looking for growth from developing markets and new technology like mobile and online payments, in the face of increasing regulations and a saturated US market for traditional credit cards.
The credit card lender and transaction processing network hired long-time mobile executive Schulman from wireless operator Sprint Nextel Corp last summer, putting him in charge of the new enterprise growth unit.
But investing in new technology comes with a price. American Express is already under scrutiny from investors over its expenses, which rose to an eye-popping $5.2 billion in the first quarter.
The company said last week that its 19 percent year-over-year jump in expenses far outpaced its sluggish revenue growth. It spent the most on rewards and marketing to its high-spending customers, who expect pricey rewards for using their American Express cards and who are being courted by rival lenders including J.P. Morgan Chase & Co.
American Express said last week that it would slow its spending growth by the end of 2011. But that planned slowdown will not affect Schulman's unit, he told Reuters.
"There's extraordinarily strong commitment from everybody in the company for what we're doing," including an understanding "that in order for us to maintain market leadership and actually grow our market position, we need to invest in these new and rapidly growing forms of payments," he said.
American Express is starting to see "the beginnings" of returns on its investments in gift cards, Schulman said, though he added that more revenue growth from his unit would be apparent "over the course of the next several years." Schulman spoke to Reuters in Miami Beach after addressing credit card executives at the annual Card Forum and Expo, a payments industry conference hosted by the industry publisher SourceMedia.