Asia: credit cards market under attack by digital payments

Monday 22 August 2016 13:03 CET | News

The payment preferences of the Asian consumers are gradually changing from the plastic credit card to mobile and online alternatives and banks have already taken account of the situation, a recent research study reveals.

As such, banks are decreasing the number of card products they offer in Asia and are focusing instead on getting a smaller range of cards adopted for online payments. In Asia, more than elsewhere, consumers are increasingly using cards for online spending while giving up some of their plastic. At 18% in 2015, regional growth in credit-card payments was double the global rate, according to a report issued by Retail Banking Research (RBR), Bloomberg reports.

Still, the actual number of cards in circulation fell in Asia in 2015 even as the worldwide tally increased, RBR research reveals. “The real game now is to get your card to be the one that sits behind the payment platform,” said Keith Pogson, a senior partner at Ernst & Young LLP. “The customer doesn’t change it. They make a decision once about which card numbers they are going to use in the system. That decision for the bank is critical because it gives them an enormous trade flow of those transactions.”, the source cites.

“What we are trying to do in Asia is to actively and aggressively reduce the number of products with fewer, more powerful and better products,” Sergio Zanatti expostulated, head of Asia-Pacific cards and personal loans at Citigroup. Citigroup has decreased its number of card offerings in Asia from 270 to just over 100, in line with the 60% reduction in global card products, Zanatti said. That contributed to the 12% drop in operating expenses at Citigroup’s consumer-banking operations in Asia in 2015.

Asia accounted for almost a fifth of Citigroup’s global consumer-banking profit in the first half of this year, the largest contribution outside North America. Asian revenues from Citigroup-branded cards were second only to North America.

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Keywords: Asia, credit card, market, digital payments, online sales, banks, payment processors, fintech, Customers, cash
Categories: Payments & Commerce | Online Payments
Countries: World
This article is part of category

Payments & Commerce