Hot competition drives credit card campaigns

  To maintain its leadership in card spending, KBank has to focus on initiating attractive campaigns to capture three key segments – shopping, dining and travelling. These three segments involve the cost of living, Pakorn Partanapat, an executive vice president, said yesterday.
The bank expects consumer purchasing power to be given a boost by the increase in personal income from the hikes in some monthly salaries to Bt15,000 and daily minimum wage to Bt300.
The “Spend Bt1,000, Get Bt1,000” campaign for cardholders shopping at three leading department stores – Central Chidlom, Paragon and Robinson Rama IX – is an example of the active campaigns that KBank is rolling out.
Until year-end, every Friday the first 1,000 customers shopping at the three stores will win vouchers worth Bt1,000.
Overall credit-card spending in the first four months increased by 14 per cent year on year, while KBank’s credit-card spending surged by 30 per cent to Bt63 billion.
The pick-up in spending reflected the recovery of consumer confidence and the effective campaigns of card issuers. The bank is confident of achieving total spending of Bt205 billion and total cards of 2.5 million, up 500,000 cards from the current level.
Active cards and new customers will help banks earn more interest and fee income.
The bank plans to drive active cards to 75 per cent of all cards from 71 per cent currently. Spending per KBank card is Bt16,000, higher than the market level of Bt10,000. Fee income from the bank’s |credit-card business this year is projected to climb to Bt3.6 billion from Bt3 billion |last year.
Fee income from the credit-card business accounts for 24 per cent of total fee income in retail banking, Pakorn said.
KBank will next quarter start seriously chasing card spenders in 14 main provinces following its upcountry strategy, he added.
Araya Phuphanich, first executive vice president of Siam Commercial Bank, said the increase in the monthly salary to Bt15,000 for newly graduated officials helped broaden the base for credit-|card holders and spurred spending |tremendously.
Spending via SCB credit cards reached Bt52 billion in the first four months, higher than expected. The bank targets total spending via its cards at Bt180 billion |this year.
Both KBank and SCB executives said the international Financial Action Task Force’s blacklisting of Thailand would not inconvenience their cardholders, as there is not much card activity abroad.
The Thai Bankers Association has been worrying that the FATF’s move would become a hindrance to credit-card holders travelling abroad after Thailand, which is one of the 15 high-risk countries, failed to enact legislation against money-laundering.
KBank’s Pakorn said international card transactions were only 7 per cent of total spending. The bank has not seen any problems for cardholders, but will closely monitor the situation.
Araya said SCB had not received bad feedback from cardholders who used their cards for spending overseas.