Credit card firms eye instalment idea
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LEADING credit-card operators are keen to cash in on the rising trend of shopping online by focusing on offering instalment options to cardholders and payment gateways to retailers that are more active in this channel.
Many retailers led by Central Group, Tesco Lotus and Big C Supercenter have added online channels with quick delivery to consumers. This has brought an increase in credit-card spending.
Thakorn Piyapan, managing director of Ayudhya Capital Services Co, or Krungsri Consumer, says online shopping has steadily increased thanks to retailers that have focused on that channel to cater to younger consumers.
Purchases via Krungsri credit cards in this category are smaller than for air tickets and travel because consumers are comfortable making small purchases when they shop online.
However, Krungsri will give importance to goods with higher prices online by offering an instalment plan with zero interest to attract cardholders.
Less than 5 per cent of total online spending is by instalment customers, so Krungsri Consumer will partner with retailers in offering promotions and instalment plans to people who want to buy expensive products from cyber-markets.
Over the next three years, online spending at Krungsri Consumer is expected to rise to 15-20 per cent of total spending from 10 per cent at present.
Credit-card spending is projected to jump 15 per cent to Bt300 billion this year.
Spur credit-card spending
Pittaya Vorapanyasakul, executive vice president for the credit-card business of Krungthai Card (KTC), said that having more retailers focusing on online shopping would help spur credit-card spending.
KTC has captured online shopping in the past few years. It sends an SMS (phone text) alert to KTC cardholders who purchase goods online if the transaction is greater than Bt100.
“What we have seen from e-commerce is that retailers have started offering promotions for goods with a larger price tag. KTC will ride this trend by making a payment system to facilitate merchants. We will also offer instalment plans to credit-card holders who want to purchase high-value goods,” she said.
KTC will promote payment gateways heavily to retailers this year.
Online purchases using KTC’s credit cards surged 20 per cent to Bt7.5 billion last year and are projected to reach between Bt9 billion and Bt10 billion this year.
The online channel accounts for 7 per cent of total spending on KTC credit cards.
Retailers should offer attractive promotions if they want to encourage offline shoppers to shop online. If the behaviour of consumers changes, cash will be replaced by plastic cards, Pittaya said.
Thawee Teerasoontornwong, executive vice president at Kasikornbank, said the bank would focus more on payment systems to facilitate merchants. The payment system of credit cards will ensure the security and convenience of both merchants and cardholders.
More retailers have focused strongly on the online channel because they want to secure market share.
At KBank, online credit-card spending at Bt25 billion accounts for 9-10 per cent of the total. KBank’s spending through shopping online is growing 20-30 per cent a year.
