Credit Card World

EON Bank targets 750,000 credit cards next year

2009-12-08T21:04:00.001+08:00

EON Bank Bhd expects to have 750,000 credit cards in circulation next year against 660,000 cards issued in 2009.

The Group's Chief Executive Officer, Micheal Lor, said the company is now planning more promotions and campaigns to make the target a reality.

"With our best selling GSC-EON Bank Visa Card still growing in terms of circulation, we don't think reaching the target will be a problem," he said.

Speaking to reporters after a prize presentation ceremony for a movie premiere contest, he said there were now 23,000 GSC-EON Bank Visa Cards in circulation since its launch in May.

On a related development, Lor said the bank's credit card business only suffered a slight setback after the government announced that a RM50 service tax would be imposed on each credit card in circulation, next year.

"The most significant impact we experienced since the announcement was a 50 per cent drop in credit card application.

"But, I am sure the announcement impacted all banks offering this service but from my point of view, the RM50 service tax should not pose a threat to consumers as they spend thousands of ringgit every month," Lor added.

He was confident the bank's credit card business would not slow down, despite the service tax, as its cards were value-added products.

Meanwhile, Lor said credit card receivables rose to RM1.4 billion this year and was expected to increase between an average of 10 and 15 per cent in 2010.

EON Bank plans to launch another credit card, next year, for discerning shoppers.

Bank Rakyat issues first credit card

2007-11-22T20:59:00.000+08:00

Bank Kerjasama Rakyat Malaysia Bhd (Bank Rakyat) targets to secure about 200,000 subscribers within two years for its first credit card, due to be launched by the first quarter of 2008.

Managing director Datuk Kamaruzaman Che Mat expressed confidence that the timing was right to venture into the credit card market and Bank Rakyat aimed to market the yet-to-be-named syariah-compliant Islamic credit card to all its eligible members, its existing 2.5 million customer base and the general public.

“We are optimistic that within the next five years we would be able to secure about one million subscribers for our card. The local credit card industry had 9.53 million subscribers as at Sept 30 and the Islamic credit card market only contributes about 1% of the total credit card transactions, or RM369mil currently.

“Our entry would help spur the growth of this market further,” he said after signing an agreement with Silverlake System Sdn Bhd chairman Goh Peng Ooi yesterday.

Under the agreement, Silverlake will provide the data centre, technology infrastructure, its Islamic credit card application software and credit card operations services that include card member servicing, authorisation, billing and statements and payment processing.

“We are the first in Asia-Pacific to adopt such a business model which would enable us to focus on providing the best product features and marketing activities, hence providing faster approval and superior service to cardholders.

“It is our hope that this partnership will help position Bank Rakyat as the leading Islamic credit card provider,” Kamaruzaman said.

Meanwhile, Bank Rakyat received the Most Outstanding Islamic Retail Banking award in conjunction with the fourth Kuala Lumpur Islamic Financial forum on Tuesday.

Bank Rakyat intends to open three new branches by year-end and about five branches next year.

AmBank sees 200,000 subscribers for new card

2007-11-20T21:08:00.000+08:00

AmBank (M) Bhd targets within a year to secure about 200,000 subscribers for its newly launched AmBank NexG-iTalk Prepaid Mastercard.

According to AmBank retail banking managing director, Mohamed Azmi Mahmood, the new card’s competitive advantage was its dual-functionality as a secure, chip-based credit card as well as a prepaid calling card with iTalk functionality.

The NexG-iTalk Prepaid Mastercard is the first fruit of AmBank’s recently forged strategic collaboration with Telekom Malaysia Bhd (TM) to boost each other’s card businesses.

“With this launch, both AmBank and TM customers will now enjoy a wider range of features in a single card that can be used for payment and for making calls at low rates. Cardholders are also rewarded for their usage simultaneously by AmBonus, TM and RealRewards loyalty programme,” Azmi told reporters after the launch yesterday.

According to TM Retail, Malaysia Business, chief operating officer Datuk Adnan Rofiee, iTalk is TM’s prepaid calling card service, which uses Voice over Internet Protocol and may be used on any mobile or fixed telephone line services.

“The NexG-iTalk offers compelling features, including iTalk’s low international call rates, flexibility in reloading, wide acceptance and also for dial-up Internet access,” he said, adding that there was a possibility of AmBank having co-branded cards with TM subsidiary Celcom (M) Bhd.

According to AmBank general manager of card services and line of credit, Perry Ong, AmBank’s prepaid credit card customer base was more than 100,000 currently.

The bank’s credit card business currently contributed less than 10% of its retail banking revenue and AmBank hoped prepaid credit cards would in time account for half the credit card business, he said.

He added that the Malaysian market was still not aware of prepaid credit cards where the user’s amount was limited only by the amount of money “loaded” into the card.

Unlike conventional credit cards, the NexG Prepaid MasterCard does not require minimum income, approval is guaranteed and usage is like a normal credit card transaction

AmBank started its prepaid credit card services last June during the 2006 FIFA World Cup campaign. Since then, it has signed up with a direct-selling company, a college and cinema operator Cathay Cineplexes.

Ong did not dismiss the possibility of launching a prepaid credit card with Visa within the next 12 months as AmBank had only collaborated with MasterCard for its prepaid credit card segment.

Alliance cash-back credit card

2007-11-02T21:10:00.000+08:00

Alliance Bank has launched a new primary cash-back credit card that rewards members for using their cards.

Giving up to 1.5% cash-back on all transactions at any outlets and on any kind of spending, the credit card is flexible and has no prerequisites to get the cash rebates. Members can use their cards for any amount of spending on all types of cards.

Alliance Bank consumer banking group head Liew Swee Lin said in a statement yesterday the card had been stylised to meet the spending patterns and behaviour of card users and was subject to their lifestyle needs.

The first to promote up to 1.5% cash-back rebate for all transactions worldwide, the new card also features a three-month free offer, and free for life membership (subject to one transaction a month).

Citibank aims for 25% growth in card spending

2007-09-04T21:13:00.000+08:00

Citibank Bhd is targeting a 25% growth in card spending over the next three months with the launch of Citibank's KLCC Mall Mania promotion.

Cards business director Vipin Agrawal said the bank was mainly targeting its existing credit card customers as it aspired to be the primary credit card for Malaysians.

He cited the overall growth in the credit card market and higher competition among member banks as an impetus for the bank to introduce new promotions to ensure existing customers remain loyal.

"Our focus is to give value to our existing credit cardholders," he said at the launch of the promotion on Tuesday.

At present, he said, Citibank had a 20% market share with over one million credit cardholders.

"Loyal customers deserve to be rewarded. The Citibank KLCC Mall Mania is our way of treating our credit cardholders to an unforgettable shopping experience.

"We did a similar shopping extravaganza with Queensbay Mall in Penang and the customers' response was extraordinary," he said.

With the current promotion, the bank's credit cardholders are offered prizes and discounts until Dec 31 at more than 40 outlets in KLCC.

Vipin said the partnership with KLCC would enable the bank to leverage on the mall's high shopping traffic, which saw some 45 million customers and generated RM1.9bil sales last year.

Maybank to grow card business by 20%

2007-07-13T12:41:00.000+08:00

Malayan Banking Bhd (Maybank) targets to grow its cashless retail purchases made via credit, charge and debit cards by 20% over the next 12 months from RM18bil as at end-June, according to head of cards business, Ashraf Ali Kadir.

He said the growth would be driven by higher consumer demand as well as the increase in online transactions particularly for the purchase of airline tickets.

Ashraf was speaking after the launch of the Maybankard Treats Fair 2007 and three new innovative services for the bank's credit and charge card members yesterday.

The fair was part of Maybank's ongoing initiative of leveraging on technology to promote cashless transactions where redemption, payments and contests were all done electronically. With “global eShop”, American Express (Amex) charge card members will now be able to access all e-shopping and e-commerce sites in the United States.

“With global eShop, you can purchase products that have yet to arrive in Asia, enjoy reduced shipping costs and have your purchases delivered to your homes at the click of the mouse,” said Ashraf.

To register, customers need to log on to www.global-eshop.biz//mbbmy, provide their membership details, create a six-digit security personal identification number and register their mobile phone number to start shopping

Amex card members also get to enjoy a flexible six months' interest-free instalment payment scheme via “Flexi Pay”. This scheme is available for any single purchase of RM1,000 and above and valid for purchases made during the promotion period of June 15 to Aug 15.

To prevent online fraudulent transactions, the bank in collaboration with MasterCard and Visa introduced Maybank Secure Online Shopping, which requires an additional password before an e-commerce transaction is processed. The Treats Fair, held at Mid Valley Megamall from July 12-15 and Penang at the Queensbay Mall from July 26-29, is part of the bank’s programme to reward card members with discounts and prizes and allow them to redeem their points under one roof.

Citibank AirAsia card launched

2007-07-12T12:43:00.000+08:00

AirAsia Bhd hopes to sign up one million cardholders for its newly launched Citibank AirAsia credit card. The target for the co-branded credit card with Citibank Bhd was “achievable” but no time frame was set, said AirAsia group chief executive officer Datuk Tony Fernandes.

“The target is there, we should go as fast as we can to get there. Ultimately, the market wants it and we can promote it. We may also consider Indonesia and Thailand,” he told a media conference after the launch of the credit card yesterday.

Also present was Citibank country officer and chief executive officer Piyush Gupta. Fernandes said AirAsia needed a regional player to grow the co-branded credit card in other countries. In Indonesia, AirAsia has not launched a co-branded credit card yet.

“My personal choice is to have Citibank (as partner) in Malaysia, Thailand and Indonesia, then we can do so many things,” he added.

The low-cost carrier had previously tied up with RHB Bank for a co-branded credit card but the contract expired last month. Fernandes dubbed the current co-brand with Citibank as a “five-year marriage” and, it would have “an option to renew” if the union proved successful.

Citibank cards business director Vipin Agrawal said existing customers could choose to convert to the new card.

“We are looking at 150,000 cards in the first year and many of those will be new customers. Currently, the primary redemption for this card is for free travel but, over time, we will provide more options,” he said.

The credit card will enable members to earn one AirAsia point for every RM1 spent on their card for daily purchases. Points collected are evergreen.

These points can be converted into AirAsia vouchers, which can be used to redeem free flights, airport taxes, fuel surcharges, administrative fees and purchase of Xpress Boarding. Cardholders will also be entitled to special privileges and access to low-fare seats during sales.

Meanwhile, on news that Virgin Group founder Sir Richard Branson would acquire a 20% stake in Fly Asian Xpress Sdn Bhd (FAX), Fernandes said: “Wait and see. I think AirAsia has always surprised everyone. So just wait and see.”

FAX is scheduled to launch long-haul budget airline AirAsia X in September. There would be two or three announcements before that, Fernandes said, but declined to elaborate.

While Fernandes denied a recent report that AirAsia planned to order 25 single-aisle planes from Airbus SAS, he reiterated that it “needs more planes” and was “looking into it but nothing was confirmed.”

Analysts: Immediate price war unlikely

2007-07-04T12:46:00.000+08:00

Affin Bank Bhd’s aggressive move in reducing credit card interest rate is not expected to trigger a price war among the banks. OSK Research analyst Chan Ken Yew said although Affin’s move might put pressure on other players, it would not immediately set off a price war.

He said while pricing was a factor in drawing in clients, other privileges and benefits - including lifestyle-based ones - were also important to lure in clients.

He added that if the marketing strategy was solely based on pricing, the bank could run the risk of attracting the “wrong” kind of clients, which could drive up default rates.

“But if it takes these factors into consideration and lures in good paying clients, the 9.9% interest rate offer is lucrative,” he told StarBiz yesterday.

Affin Bank yesterday announced it would cut its credit card interest rate by about half to 9.99% in a move to give more incentives to cardholders.

SJ Securities Sdn Bhd research head Cheah King Yoong said there were other ways of attracting more customers to take up credit cards such as introducing cash rebates and balance of transfer options.

He said most banks were flexible in offering payment options to customers, depending on the marketing strategy adopted.

Cheah added that banks would prefer to adopt other strategies to prevent raising its non-performing loan (NPL) ratios for credit cards, although this product segment enjoyed a low NPL rate.

He also said Affin Bank’s move was seen as a strategy to beef up its share in the credit card market, a segment which was considered weak for one of the country’s smallest lenders.

Another local analyst concurred, stating that competition in the credit card market was already intense, with players dangling all types of “carrots” to sign up more cardholders. He said Affin Bank’s strategy could be interpreted as a move to draw more clients and build up its base to cross sell its other consumer banking products.

M&A Securities Sdn Bhd research head Wee Kim Hong said Affin Bank’s move to reduce interest rates was an obvious step towards building its client base.

“In the credit card segment, it is a numbers game and also about building volume,” he said.

Affin Bank did not have a strong share of the retail market and cutting interest rates was a speedy way of drawing clients, adding that this product has high profit margins.

Affin slashing credit card rate

2007-07-04T12:44:00.000+08:00

Affin Bank Bhd will slash the interest rate for credit cards by about half to 9.99% to give more incentives to cardholders, but analysts do not expect knee-jerk rate cuts by established card issuers in the country.

Managing director and chief executive officer Datuk Seri Abdul Hamidy Abdul Hafiz said the move would enable users to manage debts properly by reducing the finance charge to a reasonable level.

Speaking after a cocktail reception yesterday, he said revenue from credit cards should contribute positively to the overall earnings of the bank.

Although he did not disclose the number of card users or projected growth from this business, Hamidy said the move would attract interest and boost the bank’s cardholder base and assets.

“Consumers today are very much in the know. We believe they know the difference between the charges of 18% and 9% interest rate (for credit card use),” he said.

Deputy Finance Minister Datuk Seri Awang Adek Hussin said he did not expect other banks to also cut interest rates but they would be encouraged to come up with a more competitive business model.

The reduction in interest rates would instil greater discipline among cardholders, he said, adding that banks would have to conduct strict checks for “good customers”.

“The bank will have the necessary framework to offer these reduced rates as they will not have a big margin to be complacent. This is good and works towards a more rigorous and competitive environment.

“We also think there is room for reasonable rates and prudent management of credit cards,” he said.

Awang Adek, who was present at the reception, said the Government had been in talks with industry players since two to three months ago to address the issue of high interest rates for credit cards.

Analysts contacted by StarBiz said the 9.9% rate offered by Affin Bank was attractive but pointed out that cardholders may look at other benefits and privileges when deciding on a card issuer.

Bank Negara recently introduced a three-tier interest rate for outstanding balances, where users who consistently pay their credit card bills for 12 consecutive months will be charged an interest rate of 15% on their outstanding balance. The current maximum annual interest rate for credit cards is 18%.

The central bank said the move was to inculcate discipline and prudent financial management.

Earlier in his speech, Hamidy said the bank found it challenging to make this effort profitable without burdening cardholders, but had decided to do so to reward good customers.

“At the same time, we are also encouraging customers to use their credit cards more widely, yet responsibly. The financial market will also benefit with lower provisions required for fewer non-performing accounts,” he said.

Hamidy said the new rate would take effect on Aug 31 for existing clients and with immediate effect for new customers.

To enjoy the new rate, users need to make the minimum payment on their outstanding balance by the due date.

He also said Affin Bank would introduce zero interest on balance transfer for up to 12 months.

Hamidy said the bank was also setting up a new entity, to be called Affin Banking Group, which would consist of three main business components: Affin Investment Bank, Affin Islamic Bank and AFFINBANK.

He said the group would introduce innovative measures such counterless or open-concept bank branches, voucherless banking and 24-hour automated banking services at the bank’s self-service lobbies.

The voucherless banking would allow customers to perform transactions by producing their MyKads, doing away with the filling of forms, Hamidy said.

Trapped by plastic

2007-06-30T12:51:00.000+08:00

A survey carried out by a local university has shown that 11% of bankruptcy cases were due to credit card debts and 8% of bankrupts were aged between 20 and 30. When her parents announced they were going to cut her off financially, Sarah, 27, a flight attendant, was literally floored.

“For 27 years they picked up the tab for everything from cigarettes to cereals,” she admits. “But when they found out Derek (the boyfriend they weren’t particularly fond off) and I were living together in the apartment they had been footing the rent for, mom and dad went ballistic and revoked all monetary privileges,” reveals Sarah.

“I had charged four credit cards to the tune of RM11,000, and that debt alone was overwhelming me. I couldn’t imagine having to pay all of my own bills, plus the credit card debt.”

Cut yourself loose: If your plastic has landed you in credit card hell, it’s time to cut it out of your life (model posing). — RAZIQ ABD SAMAT/The Star
In the end, Sarah took some pretty extreme measures and paid off her debt in four months.

“I hauled every single thing I owned out onto the lawn and sold it. When I was done, my possessions amounted to just two boxes of clothing and one box of personal papers and mementos. Then I called up each credit card company to work out deals, and a lot of them let me ‘settle’ my debt for slightly less than I owed or at least cut me some slack on miscellaneous fees and interest.”

Many young people are making similar credit mistakes without the safety net of wealthy parents to fall back on. In school, you have home economics classes that teach you how to bake a cake and how to make your own orchid plant holder, but no one ever sits you down to explain responsible credit maintenance.

A shiny new credit card promises the young adult a whole new world, but no one thinks about the potential pitfalls. Credit facilities allow people to spend money they do not actually have, but will eventually come into. Problems arise when you spend more money than you will come into.

“Credit cards are a good tool when put to the right use. A consumer doesn’t need to bring along a lot cash to purchase goods or services. For a business person, he has less receipts to compile when it comes time to submit his income tax return form, because most of his business expenses would appear on one credit card statement,” points out Hazel Ong-Archibald, 35, an agency manager with CIMB Wealth Advisors.

“The disadvantage is people can get so carried away with the concept that they can pay later that sometimes they forget to live within their means.”

A collection agent tells me the plight of one debtor he was assigned to track down: in his first year of owning a credit card, the man charged RM12,000. Twenty years later, the poor chap still hadn’t managed to settle it. Now, as a result of several late payment charges, interests, etc, his bill has ballooned to more than RM20,000. He was 56 years old.

“When I mentioned bankruptcy, he didn’t seem to care. It had become that bad. I felt awful asking him to pay up,” the collection agent says. As Shannon, 24, a web designer, discovered three years ago, credit is not free. Like many others, she started out using her card reservedly – the occasional RM60 lip gloss, for instance, which she paid for immediately upon receiving the bill.

But then along came Christmas. “I remember thinking to myself: I can barely get by on my measly salary, how am I supposed to buy anyone presents?” Shannon recalls.

“My three-month-old credit card seemed like the best invention in the world, so I swiped for all my presents.”

The next thing she knew, Shannon was staring at a bill of RM4,000, twice her monthly take-home pay. She panicked, and then she saw the minimum payment box – RM200 – and breathed a sigh of relief. Three years later, she still hasn’t managed to settle her outstanding balance.

“I’m being hit with interest every month,” Shannon laments. “I felt really good being able to give everyone nice presents for a change. But I didn’t know that good feeling was going to cost so much.”

According to Ong, if you only pay the minimum, you would be charged an interest of 1.5% per month or 18% per year for the outstanding balance.

“The interest payment compounds over time, and that is how many people get trapped in credit card debt,” she explains.

Some retail outlets tout zero interest, easy payment schemes using a credit card. But there is a catch. Say you want to snap up a new sound system. Instead of signing a slip for RM3,000, you sign an agreement saying RM300 will be charged to your card every month for the next 10 months. If the cardholder does not pay in full when the statement comes, then her purchase under the “Zero interest payment” scheme will be subjected to 18% interest per annum.

On top of that, there is usually an administration fee for signing up for the scheme.

Sabrina, 30, managed to service the first three instalments on a RM1,500 sofa bed, but then met with some other incidentals and couldn’t make the payments on time anymore. At the end of the 12 months, she was paying interest rates on seven months for her new sofa.

“Then again there was no way I could afford to shell out RM1,500 out of the blue just like that,” confesses Sabrina, a stylist.

Easy payment schemes like these offer a lot of convenience but it takes a great deal of discipline to make it work for you. While those who take up hire-purchase loans are protected under the Hire-Purchase Act 1967, there are no specific laws to protect those who take up easy payment schemes.

The rate of interest for the easy payment scheme is likely to be higher than that of hire-purchase since the Hire Purchase Act puts a limit on the maximum interest rate that can be charged. If you always have an outstanding balance on your credit card bill, these schemes are definitely not for you.

Banks these days are practically throwing cash and free gifts at consumers, but stay alert to changes in the terms and conditions of your credit card agreement and read the fine print.

One bank sent out cheques of RM5,000 to cardholders. Once the cheque is deposited into the cardholder’s savings account, a handling fee of RM150 is charged. Interest of 18% per annum on the outstanding balance is charged if the cardholder does not settle the monthly payment in full.

Sometimes, as customers approach their limit, the credit card company may offer to raise the limit to encourage increased spending and debt. To reel in young professionals aged 25 to 29, some banks even lower the qualification criteria.

At 18% per annum, a credit card loan is way more expensive than other types of consumer lending. You can become a bankrupt if your debt mounts to more than RM30,000. Until you are discharged as a bankrupt, you will not be able to apply for a loan.

A debt management speaker once said: “Just keep one card in case of emergency, and even then, keep it frozen in the refrigerator.”

Although this had everyone laughing, he emphasised that he was serious. So, if you have a credit card for every bank in town, it’s time to pick up the phone and start cancelling.

With interest rates at nearly 50% less than those of credit cards, some personal loan packages by banks are being viewed as an ideal way to settle your credit card debt as you repay the personal loan in fixed instalments over a period of time.

“You must, however, pay off the debt with discipline and not allow it to compound again due to an inability to service the loan repayment,” says Ong. Otherwise, you could find yourself in the same boat as Preetha, 28.

The legal assistant took a personal loan to settle her credit card debt of about RM10,000 and kept the card. As you might have guessed, it wasn’t long before she started using the card again.

“It started innocently enough,” recalls Preetha. “I used my card to pay for lunch, promising to repay it as soon as I made a withdrawal. But I never did.”

With a fixed commitment to her personal loan, Preetha found herself only able to pay the bare minimum on her credit card. It wasn’t long before she ran up a RM1,000 debt on her card, and she knew it would keep rising. She had no choice but to cut up her card.

“I’ve managed to bring it down to RM700 so far. As soon as it’s down to zero, I’m cancelling the card and getting a debit card instead – no more excuses then!” she promises.

Debit cards have become quite fashionable these days because they are virtually risk-free. Basically, they work like a prepaid card: You deposit RM1,000 in your account, and you can do up to RM1,000’s worth of spending.

You simply cannot overspend unless you top up your account. With MEPS Cash and other debit card facilities, people can learn to curb their spending, live within their means and stay out of debt.

Things you must know

2007-06-30T12:49:00.000+08:00

There are so many charges associated with credit cards. These are the common ones:

Joining fee
Some banks charge a one-time joining fee, though most don’t. The fee varies from bank to bank.

Annual fee
A flat fee charged to your card every year, whether you use it or not. Fees can range from RM60 (Classic card) to RM600 (Platinum card). Many banks waive the annual fee provided you use the card often enough. Some waive it if you take up one of their other products (such as a housing loan).

Finance charges
In other words, interest. These are imposed on the outstanding balance you’ve not yet settled after the payment due date, and it is calculated on a daily rest basis. The interest- free period is usually about 20 days.

Cash advance fee
Charged for every cash advance transaction, this fee is at 3%-5% of the total cash advance. It is charged on top of finance charges imposed on the advanced amount.

The finance charge is calculated from the transaction date or when the amount is posted to your credit card account. There is normally no interest-free period for cash advance transactions.

Late payment charges
Imposed when you fail to pay the minimum monthly payment by the due date.

If payment is made after the interest-free period, you’ll be charged both the finance charges (interest on your outstanding balance) and 1%-3% of the minimum due as late payment charge.

Three steps out of debt

2007-06-30T12:48:00.000+08:00

First, get a copy of your credit report from Bank Negara Malaysia (BNM). The report contains information on any credit card, overdraft, trade facility or housing loan you may have taken, as well as your payment records and credit limit.

If you have trouble figuring out how to read the report, contact the Credit Bureau at 1-300-88-5465 or visit creditbureau.bnm.gov.my.

Next, get on the phone and talk to a settlement or credit collection officer at the financial institution where you have an outstanding debt to negotiate a repayment plan. You may also choose to consult the Credit Counseling and Debt Management Agency (AKPK), an organisation appointed by BNM, to help counsel people with debt problems and provide advice on money management and budgeting.

They will work with you to develop personalised debt repayment plans with your financial service providers. (Their services are free.) Once your account has been regularised, your credit record will reflect the improved position.

With your finances back on track, recalculate your budget and switch to a lifestyle you can afford. This could mean driving a second-hand car as opposed to a new one.

Ask yourself: is the new car worth it when something as small as a traffic summons can screw you up for months? Is that killer dress worth scraping by for?

Strong card spending seen with new pricing structure

2007-06-27T12:56:00.000+08:00

Bank Negara believes credit card holders will continue to register strong spending growth and exercise greater financial discipline as a new tiered pricing structure is introduced in the industry.

The central bank also said lower interest rate charges on customers with a good payment track record would not hurt the banking sector's financial performance.

“It will be neutral,'' Bank Negara assistant governor Nor Shamsiah Mohd Yunus said of the financial impact of lower interest rates on the banking sector.

In a media briefing yesterday, Bank Negara said the credit card market in Malaysia had grown tremendously since 2000 as credit card transactions had increased by an average annual rate of 22.2%.

It said such a growth rate did not mean the health of the industry was in jeopardy, as the ratio of cash advances to transactions had declined to 6.8% in 2006 from 13% in 2000.

“Other indicators confirm that developments in the credit card market is not a concern,'' Nor Shamsiah said.

Credit card non-performing loans (NPLs) constitute 3.3% of total credit card loans and 1.4% of total banking system NPLs.

Nor Shamsiah said she expected credit card NPLs to continue to trend lower.

She said Bank Negara had forecast the percentage growth of outstanding balances of credit card to be in the low teens and that the annual growth rate of credit card transactions should hover just at or slightly below the 20% level.

“The growth rate of outstanding balances won't be as robust as in the past (because of the encouragement to pay early),'' she said.

Pointing out that the Malaysian credit card market was among the most regulated, Nor Shamsiah said the central bank had put in place measures to ensure the credit card industry was stable and the consumers adequately protected.

She said Malaysia's credit card penetration was relatively low compared with the developed markets.

She said high penetration of credit cards would support growth in consumption credit and tourist spending, which would, in turn, translate into higher gross domestic product growth.

The industry is expecting the number of credit card terminals to grow by 20% a year. There are currently 109,000 terminals in the country.

Nor Shamsiah said Bank Negara was also working with the industry to raise the awareness on alternative payment methods.

Pay on time to save cash

2007-06-27T12:55:00.000+08:00

Credit card holders, who pay their bills on time for 12 consecutive months starting July 1, will be “rewarded” with a lower interest rate.

The interest rate charged on the outstanding balance owed by those who promptly pay their minimum monthly payments will fall to a maximum 15% per year from the current maximum of 18%.

“The objectives are to promote credit cards as a payment instrument and to promote prudent financial management and to inculcate good financial discipline,” Bank Negara assistant governor Nor Shamsiah Mohd Yunus told the media yesterday.

According to the central bank, one third of Malaysians used their credit cards as a payment tool and settled the total amount owed on their credit cards every month.

More than half of the country’s nine million credit card holders also promptly paid at least the minimum amount owed every month.

Those who pay the minimum amount and enjoy 15% interest rate per year fall into what Bank Negara classifies as Tier 1 customers.

Tier 2 customers are those who pay at least the minimum repayment due promptly for at least 10 months out of a 12-month cycle and this category of customers will be charged a maximum interest rate of 17% per annum.

The rest fall under Tier 3 and will be charged a maximum rate of 18%, which is the current rate.

Bank Negara also said defaulters – people who missed payment for one month – will be charged 1% of the total outstanding balance or RM10, whichever is higher. The previous rate was 1% of the minimum repayment due or RM5.

Bank said to have frozen accounts

2007-06-27T12:54:00.000+08:00

A LEADING local commercial bank is alleged to have frozen the savings accounts of clients who failed to settle the minimum payment of their credit card bills after three months.

Utusan Malaysia, acting on a letter from a reader, obtained the response of the Malaysian Muslim Consumers Association which told the bank to stop the practice immediately.

“We view this practice as unreasonable,” association secretary-general Datuk Dr Maamor Osman said, adding that the bank’s move was unusual because clients were charged a late payment fee.

In the letter, the reader claimed clients could not withdraw their money through the ATM machine or over the counter and also could not perform any transaction online.

The savings accounts would only be reactivated after the clients had settled the outstanding amount of the minimum payment of their credit card bills.

Dr Maamor said the public should complain directly to Bank Negara. The daily said the bank declined to comment, saying that it required further details such as the names and account numbers of the complainants.

> Kosmo! highlighted a report about some people who were willing to fork out between RM800 and RM1,500 for fake driving licences.

It quoted Kuala Lumpur Road Transport Department director Nadzri Siron as saying that there were 68 such cases mostly involving foreign workers.

He said most foreign workers could afford to buy vehicles, but they faced difficulties in obtaining a driver’s licence due to language problems and illiteracy.

Bank said to have frozen accounts

2007-06-27T12:52:00.000+08:00

Credit card for the wealthy

2007-06-22T12:57:00.000+08:00

Bank of America Corp on Monday introduced a credit card designed for many of its wealthiest clients, in a bid to retain and win new business as banks ratchet up their pursuit of affluent customers.

The Bank of America American Express Accolades card is intended for customers who keep between US$100,000 and US$3mil of deposits and investments at the second-largest US bank.

Credit card ownership comes with discipline

2007-06-16T13:33:00.000+08:00

THE Government sees no need for tightening credit card ownership conditions because what is important is the discipline of holders in enjoying the benefits in the right way, reported Makkal Osai.

Second Finance Minister Tan Sri Nor Mohamed Yakcop said the credit card should be used as a facility to make payments and not to get loans, and added that existing criteria for owning credit cards were adequate.

He was speaking during an interview over RTM1 on Wednesday night.

Nor Mohamed said that in Malaysia, about 60% of credit card holders used the facility as a mode of payment while 40% used it as a mechanism to obtain loans.

People must realise that they cannot spend beyond their capacity, he added.

Nor Mohamed also said it was not wrong for banks to offer vehicle loans of up to 90% or more without any down payment if the buyer had the capacity to pay.

On another matter, he also regretted that many Malaysians continued to trust “get-rich-quick” schemes that promised huge and easy profits despite the numerous warnings on these scams.

> Developed nations and critics of illegal logging should help developing nations eradicate poverty and rehabilitate land through reforestation and afforestation.

Natural Resources and Environment Minister Datuk Seri Azmi Khalid said these were two critical issues in sustainable forest management, reported Tamil Nesan.

He was speaking at a meeting in Berlin on June 3 to 4 that was attended by major tropical timber producing countries in Asia and Africa and emerging economies such as Mexico, Brazil, China, India and South Africa.

The meeting was held to exchange views on measures to reduce illegal logging and to support sustainable forest management and conservation.

RHB targets 800,000 credit card holders

2007-05-04T14:24:00.000+08:00

RHB Bank Bhd is confident of achieving 800,000 credit cards in circulation by year-end from the current 700,000, said head of consumer banking Michael Lor.

He said the bank had about 650,000 cardholders at the beginning of the year and managed to add 50,000 new cardholders during the first quarter.

“At the rate we are growing, we are confident that we would surpass our initial target of adding 100,000 cardholders. We will be coming up with more innovative campaigns and promotions to increase our card base,” Lor said after launching the RHB Getaway contest yesterday.

He said the bank would be launching a contest to attract new customers and give existing credit cardholders a chance to win travel packages, in line with the Visit Malaysia Year 2007 campaign.
RHB Bank currently has a 7.6% share of the local credit card market. Total spending by its cardholders stood at RM2bil while card receivables stood at RM1.33bil in 2006.

The bank hopes to increase card spending by 20% this year. Lor said while its customer base had grown, the bank's non-performing loans (NPLs) level was still well managed.

“Our NPL for credit cards is around 4% in line with the industry level,” he said, adding that the bank was also targeting 20% growth in credit card issuance and wealth management over the next three years.

EON Bank eyes 100,000 takers for its lifestyle card

2007-03-23T14:30:00.000+08:00

EON Bank Bhd is targeting to register 100,000 customers within 12 months for its soon-to-be-launched RFID and Visa Wave All-in-One lifestyle card.

Vice-president (credit card centre) Aaron Tan said initially the number only covered customers in Johor.

He said the bank would also target the existing 50,000 holders of Johor Baru City Square “BLISS” card to take up the new product.

“After Johor, we will introduce the lifestyle card to consumers in the Klang Valley,” he said after a briefing by Berinda Properties Sdn Bhd chief executive officer Frank Goon.

Tan said the bank was not perturbed with news that many Malaysians were declared bankrupts in recent years due to bad credit card spending.

“We have some 450,000 credit cardholders who are good pay masters and so far, only 20 of them were declared bankrupts,” he said.

Goon said the new card, to be launched on March 30, would be the first in the world to function as a credit card, Visa Wave Card and contain various Radio Frequency Identification Device (RFID) functions.

The RFID applications can be used at the latest properties developed by Berinda, JB City Square and the Ponderosa Golf and Country Club.

Goon said the technology was developed by Berinda’s associate company Asis Technologies Pte Ltd and it planned to extend the technology to other parties. He said Berinda, a unit of the Kuok group, held the rights of the technology.

No plans to tighten credit card use

2007-03-17T14:47:00.000+08:00

Deputy Finance Minister Datuk Awang Adek Hussin says he does not see any need for a drastic action of limiting or tightening the use of credit cards. This was because 60 per cent of credit card holders settled their debts once they received the bills, he told reporters at the Sultan Ismail Airport here Friday.

"Most people use credit cards for the convenience when making a purchase. Bringing cash in big amount poses a risk of being robbed. This is a fact that one needs to remember," he said.

He was commenting on a statement by Credit Counselling and Management Agency Chief Executive Officer Mohamed Akwal Sultan that 40 per cent of about five million credit card holders nationwide had failed to settle their debts in arrears amounting to RM18.6 billion as at October last year.

Of the total, RM700 million had been categorised as non-performing loans (NPL), he said. Awang Adek said credit card debts in arrears had reached RM20 billion as at December last year but the NPL was only RM700 million.

"If we calculate, the NPL is only about 3.3 per cent of the total debt. It's not that high. It's not very worrying," he said.

On another development, Awang Adek said the Government had sufficient funds to finance over 33,000 projects worth RM2.166 billion that would be implemented by Class F contractors this year.

"Not a problem, RM2.166 billion is small compared to the total government expenditure of RM140 billion," he said.

Citibank unveils new reward plan

2007-03-16T14:33:00.000+08:00

Citibank Bhd has launched a campaign to make it easier for credit card holders to collect points under its Rewards Points programme. The “Everyone's A Winner” promotion is an expansion of the previous “Guaranteed To Win” programme which was deemed to be successful.

The latest scheme, which runs from March 1 to May 31, increases the amount of Rewards Points cardholders can collect by charging a minimum of RM50 on a single receipt for eight different transactions a month.

Previously, the points multiplier was eight times the amount spent. This has been increased to a minimum of 12 times. Cardholders can qualify for a points multiplier of up to 75 times, depending on the amount charged and frequency of use.

The points can be used to redeem more than 240 items. Cardholders can also redeem the points for discounts on purchases in Malaysia and abroad.

“Feedback from our customers based on the previous campaign indicated that a large number of them would participate in a campaign that offers guaranteed rewards instead of contests.

“This concept fits well with Citibank's overall credit card strategy that promotes brand loyalty,” Citibank cards business director Vipin Agrawal said in a statement.

“With this programme, we are not only encouraging customers to consolidate all their purchases on Citibank credit cards but we are also rewarding existing loyal customers,” he added.

“Everyone's A Winner” promotion is open to all Citibank credit card customers who participate via short messaging service and is applicable to all retail purchases.

AEON expects net profit to grow by 50%

2007-03-13T14:35:00.000+08:00

AEON Credit Service (M) Bhd expects a net profit growth of over 50% for its current financial year ended February 28, 2008, driven by its credit card, easy payment services and personal financing business.

Managing director Naruhito Kuroda said this was an increase from AEON's net profit growth of about 46% in the previous financial year. He said the company also expects to grow its revenue or sales figures from about RM650mil to RM950mil or RM1bil in the current financial year.

"We expect an increased demand for our services and for AEON-CASH, especially as we offer attractive financing rates and target a wider customer base," he told reporters after the launch of the AEON Automated Teller Machine (ATM) network on Tuesday.

He said the company expected sales contribution from all its services to be proportional, citing expected contribution from its personal financing services of RM100mil for its current financial year.

This is up from the RM46mil recorded for financial year ended February 28.2007. Kuroda also said AEON wanted to increase the take-up rates of its credit card and personal financing services.

AEON expected its credit cardholders to grow to 150,000 in the current financial year from 70,000 cardholders.

This figure is from its 500,000-strong client base, out of which 15% were customers of AEON-CASH, its personal financing product based on the Islamic principles of Bai-Al-Inah. AEON-CASH allows clients to take loans of up to RM20,000 with no need for a guarantor and facility for customers to withdraw any amount from the loan via ATM.

Hong Leong Bank expects 50,000 new MTV credit card holders

2007-01-30T14:38:00.000+08:00

Hong Leong Bank Bhd (HLB) expects to sign up more than 50,000 new subscribers for its relaunched MTV credit card within a year, said personal financial services chief operating officer Moey Tan. She said the card was targeted at consumers aged 24 to 32 and with annual income of over RM24,000.

“Research shows there are 1.4 million consumers in this segment and we want to tap this market,” she told a press conference after the relaunch of the card on Tuesday.

HLB's MTV credit card was first launched in 2003 and has a cardholder base of 50,000.

Group managing director Yvonne Chia said the credit card business was among the fastest growing business segments under the bank's personal financial services division.

She said HLB was confident the card would be well-accepted as living standards and gross domestic product per consumer was expected to grow, a trend also seen in other economies of the region.

Tan said the relaunch was to keep the product relevant as this consumer segment's outlook and lifestyles were constantly changing. “We have to keep the brand young and the MTV Credit Card allows us to do that,” she added.

StanChart forges tie-up on card protection

2007-01-20T12:45:00.000+08:00

Standard Chartered Bank Malaysia Bhd (StanChart) has formed a partnership with Card Protection Plan Ltd (CPP) to offer its members card protection.

The plan offers a 24-hour “one call does it all” worldwide convenience to credit card members who lost their handbag or wallet to report the loss of credit card, debit card, membership or loyalty card as well as MyKad, driving licence, passport and other valuable documents.

This was the bank's first new product this year and StanChart planned to launch at least 50 more by year-end, country head of consumer banking Shyam Srinivasan said after launching the card protection plan yesterday.

He said with consumer demanding for better products and services, as well as increased spending driven by the country's economic expansion, StanChart expected a strong growth in the country's credit card industry.

“I would expect a 15% growth in the industry this year,” Shyam said.

StanChart is the latest bank to work with CPP and the tie-up is aimed at boosting its credit card business.

Shyam said once a loss was reported to CPP's service provider, the loss of all valuable documents would be immediately reported to the respective parties.

The two types of card protection offered are individual plan at RM78 and household plan at RM98 per year. The household plan covers the cardholder and four other persons at the same billing address.

“The card protection plan is offered to all our credit, debit and ATM card members,” Shyam said.

CPP Asia-Pacific managing director Howard Davidson said the company was now working with 280 global banks and planned to add two or three more to the list this year.

MBF-JCB Card network deal sealed

2007-01-18T14:40:00.000+08:00

MBF Cards (M) Sdn Bhd has formed a strategic alliance with JCB International Co Ltd, the biggest credit card company in Japan, to expand the merchant networks of both companies in this country.

JCB, which has 20,000 merchants (retailers who have JCB credit card readers) in Malaysia, has alliances with about 350 leading banks and financial institutions globally to increase merchant coverage and card-member base.

“Through this alliance, MBF Cards hopes to sign up 10,000 JCB merchants this year,” president Huan Woon Han said after signing the agreement with JCB president and chief operating officer Kunio Yoshizawa yesterday.

With the growing Japanese presence in Malaysia, the JCB card would be well received, Huan said, adding that membership should rise with more tourist arrivals this year in conjunction with Visit Malaysia Year.

“MBF Cards has signed up 26,000 merchants. We aim to increase this figure to 50,000 by 2008,” Huan said, adding that on the average, it signed up about 1,000 merchants monthly.

MBF Cards, a subsidiary of MBF Holdings Bhd, has about 500,000 cards in circulation and it hopes to double the figure in two years. MBF card members spent about RM3bil last year, and Huan said he expected a 20% growth in spending this year.

Credit card NPLs, albeit small now, may be warning sign

2007-01-12T16:20:00.000+08:00

The level of credit card non-performing loans (NPLs), though not alarming, should be seen as a "warning sign" that ought to be tackled before it becomes a bigger problem, Bank Negara Malaysia deputy governor Datuk Mohd Razaif Abdul Kadir said.

He said that the credit card NPL ratio in Malaysia was not serious as 60% of credit card holders settled their dues on time.

As of Nov 2006, the total number of credit cards stood at 8.8 million, which represented about 3.17 cards per principal holder.

“However, we have to be proactive to keep the number of NPLs from rising. We cannot afford to ignore this early warning signal, as we do not want Malaysia to end up with a huge NPL problem,” he told reporters at the launch of the Agensi Kaunseling dan Pengurusan Kredit (AKPK) branch in Penang on Jan 12.

“As of Oct 2006, total credit card loans stood at RM18.6 billion, which translates to 3.2% of total loans outstanding in Malaysia.

"Out of the figure, only RM700 million are NPLs, which is quite small comparatively,” he said.

AKPK, an agency set up by Bank Negara now has a total of six outlets nationwide in Penang, Kuala Lumpur, Johor Bahru, Kuala Terengganu, Kuching and Kota Kinabalu.

The organisation provides eligible individual borrowers assistance in restructuring debts relating to housing loans, credit cards and other personal loans obtained from institutions regulated by Bank Negara.

Mohd Razif also said as of Dec 2006, AKPK had handled 11,646 cases, 14% of which were related to debt management. About 51% of the 1,588 debt management cases were credit card related.

RHB targets 20% rise in credit card base

2006-12-29T17:58:00.000+08:00

RHB Capital Bhd’s consumer banking division is targeting a 20% growth in its credit card base for 2007, said consumer banking division head Michael Lor.

“We have already grown more than 20% this year and we are planning a similar growth next year,” Lor told reporters at the prize giving ceremony of the RHB Cash Payout contest for RHB credit card holders.

RHB Capital’s financial year-end is Dec 31.

Currently, there are 680,000 RHB credit card holders and a 20% increase would mean an additional 120,000 subscribers.

The consumer banking division also plans to increase its current credit card receivables base by the same percentage of 20%.

In order to do this, RHB would continue serving customers’ needs, Lor said, and focusing on “what people look for in banking products.”

Examples of such promotions were enabling cardholders to redeem reward points at Hock Sin Leong retail outlets, and contests with cash payout as prizes, he added.

RHB credit cards currently made up of 7.3% to 7.5% of market share in Malaysia, RHB Bank head of cards and unsecured business Gan Kheng Chai said.

The most popular card is its RHB EVO-brand credit cards.

He said other growing and popular card categories included RHB’s gold and black cards.

At present, the bank’s credit cardholder portfolio was predominantly from the young and professional segments, Gan said, adding that the bank was planning to continue its focus on these customer segments.

The bank hopes to eventually increase contribution of the credit cards business to 25% of revenue of the consumer banking division from about 10% currently.

“We hope to do this in two to three years,” said Lor.

On overseas expansion, Lor said RHB already had a presence in Singapore, Thailand and Brunei and would continue to build its business in these countries.

“We have a seven-branch network in Singapore,” he added.

The RHB Cash Payout contest, which ran in October and November this year, saw a total of 77 RHB credit card holders win cash prizes totalling RM120,000.

MBF Cards to boost market share with own credit line

2006-12-21T14:35:00.000+08:00

MBF Cards (M) Sdn Bhd aims to clinch a bigger share of the local credit card market after being granted a special licence by Bank Negara Malaysia to issue credit cards via its own line of credit.

Its president Huan Woon Han said the establishment of its own line of credit would enable the company to hit its targeted one million cards in circulation by 2008. It has over 500,000 cards in circulation currently, or 8% share of the credit card market.

He said the company commenced issuing cards under its own line of credit in October. He described it as a breakthrough for MBF Cards - a non-bank backed card issuer - as it now had the independence and flexibility in processing card applications.

He said it would be able to determine its own criteria for credit assessment, including credit limit offering, which would significantly reduce the turnaround time and improve efficiency.

"It is a catalyst for us. We will have full control of the whole process (from processing card applications to issuing cards). We can earn full interest incomes.

"The LOC (line of credit) puts us in the level playing field to capture a bigger market share," he told reporters after launching the MBF Visa Platinum card in Kuala Lumpur on Dec 20.

Huan and Perera at the launch of MBF Visa Platinum
Prior to this, MBF Cards, a unit of MBf Holdings Bhd, had to share its interest incomes with third party financial institutions, which provided credit to the card issuer.

Huan said the company's contribution to the group's earnings in financial year 2007 is expected to grow by 40% in anticipation of the growing credit card business.

On the newly launched MBF Visa Platinum card, Huan said its initial target is to issue 20,000 cards within 12 months, targeting 5% of the 400,000 affluent population in Malaysia.

The MBF Visa Platinum card targets customers with an annual income of at least RM80,000. Besides offering a minimum credit limit of RM25,000, it is also Visa Wave-enabled for contactless payment.

Meanwhile, Visa International (Asia Pacific) Ltd country manager for Malaysia Jeffrey Perera said the MBF Visa Platinum card would target at both its existing top-tier cardholders and new customers.

He said it had issued 206,000 platinum cards in Malaysia as at Sept 30, a 41% rise from a year ago. Visa had issued only 2,000 platinum cards when the premium card was first introduced in Malaysia in 1999.

EON Bank wants to issue 100,000 new credit cards in 2007

2006-11-15T09:11:00.000+08:00

EON Bank Bhd plans to increase the number of credit cards issued by 21% to 580,000 cards next year from 480,000 cards this year, its head of credit cards Aaron Tan said.

“We will still have a high pace of growth next year. We expect to issue another 100,000 cards," he said after the launch of EON Bank Visa B2B Distribution Credit Card in Kuala Lumpur on Nov 15.

Tan said EON Bank and its partners would develop more products, using the latest technology. Its recently launched Visa Wave card has been well received.

“We will continue to leverage on Visa Wave to capture the market,” he added.

At end-2005, EON Bank had 360,000 card holders and this number is expected to increase to 480,000 by end-2006.

Tan said 90,000 cards had been issued so far this year and another 30,000 should be issued within the next 1 1/2 months as consumer spending would usually pick up in November and December due to the festive season.

EON Bank group chief executive officer Albert Lau Yiong said the EON Bank Visa B2B distribution credit card would simplify the procurement process and replace traditional invoicing methods.

Lau expects to sign up another five merchants in the next six months and issue 10,000 such cards within the next 12 months.

On Nov 15, it signed up three merchants – Diethelm Malaysia Sdn Bhd, Zitron Enterprise (M) Sdn Bhd and Kai Shen Marketing Sdn Bhd – for the programme.

Credit cards contribute about 10% to the bank’s bottom line.

MBF card way to smart spending

2006-10-21T17:03:00.000+08:00

If you cannot run away from spending money, especially during the festive season, why not spend wisely. According to MBF Cards (Malaysia) Sdn Bhd marketing and sales senior vice-president Rajjish Verronn, MBF cards would be the tool to do so.

He said its current four-month campaign focused on helping cardholders spend wisely and get more value for their ringgit. He added that the campaign, which began last month and would end in December, targeted to gain 15,000 new members each month to its present total of more than half a million cardholders.

“Get smart every day with MBF cards with the money you spend,” he said, adding that major expenses might be incurred during the festive season. He said that every month 5,000 cardholders with approval codes on their transaction slip ending with “5” would win RM50 in petrol credit.

“In total, MBF Cards is giving away RM1mil of petrol credit to its members during the four-month campaign,” he said yesterday. He added that a member also stood a chance to win RM5,000 as long as he or she transacted a minimum RM50 using MBF cards.

“We are also giving out our Zing card free for a limited time to our members,” he said, stressing the convenience Zing cards could be to road users.

“We partner Touch ‘n Go. We top up RM100 to our members’ Zing cards every time the value drops below RM50,” he said.

MBF Cards also introduced its Auto Bill Pay to make bill payment convenient. On the tendency of irresponsible spending and level of bankruptcy because of uncontrolled credit card spending, he said: “A credit card is a tool and it’s a matter of whether you are prudent, and can remain prudent as your income increases.”

“That’s why we stress our tagline ‘Get Smart Every Day with MBF Cards – Stretch Your Ringgit’ and we will continue to look for strategic alliance and relevant partners in areas like health and travel to provide more benefits for our members,” added Rajjish.

RHB Bank expects credit card base of 715,000 by year-end

2006-10-05T11:12:00.000+08:00

RHB Bank Bhd is confident of achieving 715,000 credit cards in circulation by year-end, said head of consumer banking Michael Lor.

“We will be coming up with more innovative campaigns and promotions to increase our card base,” Lor said after launching the RHB Big Cash Payout campaign and a prize-giving ceremony for Spend & Win RM200,000 Superman Returns contest yesterday.

The bank was expected to introduce more new products going forward, he said, adding that it was currently in talks with potential partners for a new co-branded credit card but did not elaborate.

Meanwhile, Lor said the bank’s credit card business had been rising steadily over the past three years. “Currently, we have about 650,000 credit cards in circulation. In the first nine months, our card business expanded about 20% and card spending rose 21%,” he said.

Lor said the total spending by its members so far stood at RM1.2bil, surpassing the bank’s initial target of RM1bil for the entire year. RHB Bank currently holds a 7.6% share in the local credit card market.

Lor said while the customer base for its credit cards had grown, the non-performing loans (NPL) level was still well managed. He said the bank’s NPL level for credit cards at around 4% was still below the industry level.

The RHB Big Cash Payout is a four-month 2-in-1 campaign whereby its card members will receive benefits when they shop as well as participate in the Big Cash Payout contest.

“We will be introducing more exciting deals under various themes from this month onwards, so card members are advised to look out for information on on-going promotions in the local newspapers or at our website to fully take advantage of this campaign,” Lor said.

Malaysia ahead in fighting online credit card fraud

2006-06-10T14:42:00.000+08:00

Although the usage of electronic payment in Malaysia is still low compared with developed countries, it is nonetheless a “fast mover” when responding to online fraud, MasterCard International vice-president for operations and advanced payment products (South-East Asia) David Chan said.

He said Malaysia was among the first countries in the world to migrate to EMV (Europay-MasterCard-Visa) cards in an effort to combat credit card fraud.

“Realising that online fraud can cause huge losses, banks in Malaysia are moving fast to equip themselves with more secure anti-fraud codes and devices.

“The rate of adoption by local banks is fast, judging from its size if compared with developed countries,” he told StarBiz after presenting his paper entitled “Banking Technologies and Cost Effectiveness: Migration to Electronic Payment” yesterday.

He added that online authentication was essential for sustaining continued online payments and banking growth. Chan said online payments globally currently accounted about 10% of the total US$5tril plus e-payments business. He attributed this enormous figure to the rising e-commerce business worldwide.

He said although online fraud was 20 times higher than total card fraud in the US, nevertheless it had declined with the usage of more secure online fraud codes and devices.

Citibank unveils latest campaign

2006-06-07T14:50:00.000+08:00

Citibank Bhd has launched its latest campaign, “Stay For Sure”, which will run from June 1 to Aug 31. Aimed at encouraging customers to consolidate all their purchases on their Citibank credit cards, the campaign is giving away free hotel stay to Citibank credit card holders.

All the campaign requires is a minimum spending of RM8,000 within the next three months on the customer’s Citibank credit card, the bank said in a statement. “We’ve designed a promotion that assures our customers a guaranteed reward, provided the requirements are met,” said Citibank’s cards business head Vipin Agrawal.

Vipin said as the credit card market had grown, competition had moved to the next level on whose cards get most used by customers. “People may carry several credit cards in their wallet but with Citibank’s focus on loyalty and usage, the incidence of use of a Citibank credit card is certainly higher than that of others,” he said.

“From an industry-wide perspective, Citibank also tends to give higher credit lines to customers. With attractive usage promotion and merchant offers, we will continue to make Citibank credit card the primary card in customer’s wallet,” he added.
According to Bank Negara data, up to March 2006, there were 8.03 million cards in force in Malaysia with usage amounting to RM10.9bil.

Maybank aims 50,000 Platinum cards

2006-06-06T14:54:00.000+08:00

Malayan Banking Bhd (Maybank) is targeting to issue 50,000 of its newly launched Platinum MasterCard in a year, executive president and head of cards business group Ashraf Ali Abdul Kadir said. He said the bank had embarked on a nine-month campaign to increase the card user base and had targeted to achieve 40,000 members at the end of the campaign period.

“Among other things, we will invite prospective members through phone calls and letters,” he said before the card's launch yesterday. Touted as a Priceless Travel Companion, the cards are targeted at the society's upper echelon and those who seek exclusive Platinum credit-card benefits, including fantastic offers by merchants in the travel and holiday industry.

Card users will, apart from having access to Maybank's largest credit-card merchant base, also enjoy travel and tour packages and continual joint campaigns with the bank's merchants. MasterCard International boasts a strong international network and global sponsorship agreements for international events such as the 2006 FIFA World Cup.

“For those initiated into our Platinum membership, we will promote special programmes and tie-ups with exclusive merchants,” Ashraf said. Maybank has issued some 1.2 million cards to date, mainly MasterCard. Ashraf said the bank's credit cards in circulation had been growing 20% annually, adding that he expected similar growth rate this year.

In conjunction with the launch, Maybank is holding a contest for members beginning July 1 to March 31, 2007. The grand prize, worth US$50,000, includes a round trip by private jet to the Banyan Tree Resort in Phuket, Thailand, in a three-day, two-night package for six people.

MasterCard International vice-president and senior country manager for Malaysia and Brunei, Jim Cheah, said the Platinum MasterCard programme in the country had grown “by leaps and bounds'' over the past few years, driven by strong economic growth.

”All Maybankard Platinum MasterCard holders can enjoy special packages and value-added benefits from an assortment of hotels, spas, golf courses, restaurants, merchants and retailers,” he said.