Kbank to promote merchant side of credit-card business
Kasikornbank will concentrate on promoting the merchant side of its credit-card business next year to drive more spending through its card.
The special cooperation with its retail partners has pushed its merchant business up 25 per cent this year, Chatchat Payuhanaveechai, first senior vice president, said last week.
The bank now is the leader in merchant accounts, controlling 32 per cent of total spending of Bt280 billion.
KBank has 60,000-70,000 electronic data capture (EDC) machines to serve merchants. The bank’s partners under its two-tier pricing strategy – under which they use the bank’s EDCs and accept KBank credit cards – will pay lower fees to the bank.
The two-tier pricing practice has attracted many retailers to use more KBank EDCs and join in offering exclusive promotions with the bank’s credit card. Significant growth is predicted with spending per head per month reaching an average of Bt18,000.
Spending sentiment is forecast to return to normal in the second quarter of next year, so the strategy to work closer with merchants will enable the bank to realise growth.
KBank will boost merchant transactions through four activities – travel, dining, shopping and health. The bank targets credit-card charges via its merchants to grow at least 20-25 per cent in 2012, even though overall credit card spending might not expand much, as people are expected to save money to fix their residences.
Credit-card spending has slowed since the flood and even though December is the season of spending, purchases via credit cards are likely not to increase much.
Charges to KBank credit cards this month will be 20 per cent lower than December last year.
Purchases with KBank credit cards should end this year at Bt170 billion, higher than Bt140 billion last year. However, its outstanding credit cards loans did not increase from Bt40 billion in 2010.
It issued 450,000 new cards, bringing the total of KBank credit cards in circulation to 2 million.
To increase its credit cards to 2.4 million next year, besides the merchant strategy, KBank will adjust marketing campaigns to add value for cardholders, he added.
