Business

Tuesday March 22, 2011

Bank Islam forecasts 500,000 Visa debit card users


KUALA LUMPUR: Bank Islam Malaysia Bhd expects the issuance its newly launched Visa debit card to reach 500,000 by the end of the year based on the demand seen since it was made available three weeks ago.

Its general manager of consumer banking division Khairul Kamarudin said since it was in the market about three weeks ago, the debit card had received overwhelming response from customers.

“The daily issuance for the debit card stands between 1,500 to 2,000 cards, which has accumulated to about 27,000 to 28,000 cards today,” he told reporters after the launching of its Debit = Myvi campaign yesterday for its new Visa debit card. Commenting on the impact of the debit card on its current and savings accounts (CASA), Khairul expects an increase in CASA as via electronic transactions, the need to withdraw money would be reduced.

“Research has shown that for every RM100 a person withdrew, about RM63 was spent on retail.To date, we have issued about 2.5 million ATM cards,” he said, adding that the introduction of the Visa debit card was timely in view of the new credit card minimum income guidelines.

Khairul expected the new credit card minimum income guidelines to have some impacts on credit card demand but it would be minimal.

“This is because the minimum income requirement is only criteria that was changed. The credit worthiness evaluation remains intact thus we do not have to put in extra investment to change the system.

“Also, we now have the debit card that also cater for those who are not eligible for a credit card,” he said.

Last Friday, Bank Negara Malaysia announced that the minimum annual income requirement for credit card eligibility has been raised to RM24,000 from RM18,000 in a move to keep household debt at manageable levels.

And for cardholders earning RM36,000 per annum and less, they can only hold credit cards from a maximum of two issuers.

Khairul said Bank Islam currently had issued about 500,000 credit cards where approximately 30% of the card holders had monthly income of between RM1,500 to RM2,000.

“Nevertheless, we target to have an additional 50,000 credit cards by year-end,” he said.

This new minimum income guidelines for credit cards was about more than a year after an RM50 per card service tax was introduced on Jan 1, 2010.

Khairul said due to the RM50 service tax for each credit card, initially the industry witnessed major credit card cancellations initially.

“But some of the cancellations were due to consolidations, but now the situation has somewhat stabilised,” he said.

Elaborating on the Debit = Myvi campaign, Khairul said it was to encourage and reward its customers to use the Visa debit card for daily purchases and transactions.

“To qualify for this campaign, card members have to make a minimum retail transaction of RM10 for one entry at any retail outlet with the Visa logo, nationwide. And card members that subscribe to our TAP mobile banking-i service will automatically receive an additional entry,” he said.

The campaign that will run from Mar 21 to Sept 20 offers prizes such as six Perodua Myvi and weekly cash rewards in the form of cash rebates up to maximum of RM1,000.

Visa Malaysia country manager Stuart Tomlinson said the campaign was aimed at reinforcing using a debit card as well as offering better payment alternative to credit card for customers.

In conjunction with the campaign, Bank Islam is holding a seven-day sales carnival at Plaza Low yatt Shopping Centre starting from March 21.

ENDS

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