25-10-2010, 05:40 AM
Good news - people are spending once again.....on credit! Haha!
Business Times - 25 Oct 2010
Card issuers go into market share overdrive
They ramp up offerings to tap economy's strong rebound
By SIOW LI SEN
(SINGAPORE) The cards business is booming as consumers readily reach for their plastic to reward themselves for working hard amid Singapore's fastest economic expansion in history.
Banks are in overdrive - offering rebates on supermarket purchases and adopting guerilla tactics of 25 per cent savings on petrol - all in an effort to make sure their credit and increasingly debit cards get an airing from the bulging confines of consumers' wallets.
Total card billing in August was up 10.4 per cent year to date and 18 per cent year on year at $2.6 billion, according to the Monetary Authority of Singapore.
With full employment and expected economic growth of 13-15 per cent for the year, credit card bad debts written off has fallen to $14.1 million from $16.9 million a year ago.
In their efforts to outdo one another, besides offering more rebates, discounts and freebies, some card issuers have resorted to relaunches while others continue to launch new cards.
Standard Chartered recently launched a 'Preferred' card aimed at the middle segment - those earning between $6,000 and $16,000 - by doling out services similar to those offered to the affluent crowd.
Not to be outdone, DBS relaunched its Black Card - targeted at the emerging affluent and threw in a black Aston Martin lucky draw.
At the other end of the affluent, Citi Singapore launched its Ultima card for private bank clients, by invitation only to customers with minimum assets of $5 million. Last month, OCBC Bank came out with its Elite card for those who earn at least $250,000 a year.
The enthusiasm of the card industry even prompted questions in last Monday's Parliament session.
The government's response was that banks have to comply with rules governing the card business and that there are measures in place to ensure that consumers do not spend beyond their means.
In spite of the concerns, card usage is well established and bankers say that they are giving consumers what they want.
'Credit card is a convenient mode of payment that allows users to enjoy certain benefits that they will not be entitled to if paying via other means,' says Ooi Huey Tyng, DBS Bank head of cards and unsecured loans.
Consumers will be happy to know that there will be no let-up from their banks in finding ever more creative ways to reward them for using their credit and charge cards.
Says Gan Ai Im, United Overseas Bank regional & Singapore head of cards & payment products: 'In line with our philosophy of staying on top of consumer demands and consumer trends, we will always be looking at new products, bundling or repackaging.'
UOB is Singapore's top card issuer, accounting for one in four cards here. It has made the most gains among the local banks.
For first-half 2010, UOB posted credit card income of $94 million, up 27 per cent. DBS and OCBC posted credit card income of $69 million and $22 million respectively for the same period.
With a healthy economy fuelling spending, every bank is determined to increase its market share. Rivalry, already at fever pitch, will intensify.
Says Ms Gan: 'A successful card business is fuelled by know-how, imagination and volume. Volume is the reason that competition is intensifying as all card issuers are trying to gain market share.'
This month, HSBC upped the ante on petrol by giving 25 per cent savings for a limited period of 10 days, ending yesterday.
HSBC has also been aggressive in increasing the amount of rebates given at certain supermarkets to up to 10 per cent.
The typical petrol discount is 15 per cent and supermarket rebates are 1-5 per cent, as supermarket margins are generally low.
Says Greg Zeeman, HSBC Singapore head of personal financial services: 'Our credit card business is growing at a healthy and sustainable rate, in line with our expectations and market growth.
'We anticipate that credit card spending will stay strong on the back of growing consumer confidence and the recovery of the economy.'
Not to be outdone, Citi Singapore, with over one million cards in circulation as at last week, launched a new Everyday card which gives rebates anywhere, anytime for absolutely anything.
'As the economy improves and salaries rise, consumers have greater disposable income to pay down their purchases on credit cards,' says Han Kwee Juan, Citi managing director and head of credit payment products.
'At the same time, we believe that consumers are prudent about the way they spend their money and they see spending on credit cards as a means to offer them the most value in terms of privileges, discounts, rewards or cash back.'
Business Times - 25 Oct 2010
Card issuers go into market share overdrive
They ramp up offerings to tap economy's strong rebound
By SIOW LI SEN
(SINGAPORE) The cards business is booming as consumers readily reach for their plastic to reward themselves for working hard amid Singapore's fastest economic expansion in history.
Banks are in overdrive - offering rebates on supermarket purchases and adopting guerilla tactics of 25 per cent savings on petrol - all in an effort to make sure their credit and increasingly debit cards get an airing from the bulging confines of consumers' wallets.
Total card billing in August was up 10.4 per cent year to date and 18 per cent year on year at $2.6 billion, according to the Monetary Authority of Singapore.
With full employment and expected economic growth of 13-15 per cent for the year, credit card bad debts written off has fallen to $14.1 million from $16.9 million a year ago.
In their efforts to outdo one another, besides offering more rebates, discounts and freebies, some card issuers have resorted to relaunches while others continue to launch new cards.
Standard Chartered recently launched a 'Preferred' card aimed at the middle segment - those earning between $6,000 and $16,000 - by doling out services similar to those offered to the affluent crowd.
Not to be outdone, DBS relaunched its Black Card - targeted at the emerging affluent and threw in a black Aston Martin lucky draw.
At the other end of the affluent, Citi Singapore launched its Ultima card for private bank clients, by invitation only to customers with minimum assets of $5 million. Last month, OCBC Bank came out with its Elite card for those who earn at least $250,000 a year.
The enthusiasm of the card industry even prompted questions in last Monday's Parliament session.
The government's response was that banks have to comply with rules governing the card business and that there are measures in place to ensure that consumers do not spend beyond their means.
In spite of the concerns, card usage is well established and bankers say that they are giving consumers what they want.
'Credit card is a convenient mode of payment that allows users to enjoy certain benefits that they will not be entitled to if paying via other means,' says Ooi Huey Tyng, DBS Bank head of cards and unsecured loans.
Consumers will be happy to know that there will be no let-up from their banks in finding ever more creative ways to reward them for using their credit and charge cards.
Says Gan Ai Im, United Overseas Bank regional & Singapore head of cards & payment products: 'In line with our philosophy of staying on top of consumer demands and consumer trends, we will always be looking at new products, bundling or repackaging.'
UOB is Singapore's top card issuer, accounting for one in four cards here. It has made the most gains among the local banks.
For first-half 2010, UOB posted credit card income of $94 million, up 27 per cent. DBS and OCBC posted credit card income of $69 million and $22 million respectively for the same period.
With a healthy economy fuelling spending, every bank is determined to increase its market share. Rivalry, already at fever pitch, will intensify.
Says Ms Gan: 'A successful card business is fuelled by know-how, imagination and volume. Volume is the reason that competition is intensifying as all card issuers are trying to gain market share.'
This month, HSBC upped the ante on petrol by giving 25 per cent savings for a limited period of 10 days, ending yesterday.
HSBC has also been aggressive in increasing the amount of rebates given at certain supermarkets to up to 10 per cent.
The typical petrol discount is 15 per cent and supermarket rebates are 1-5 per cent, as supermarket margins are generally low.
Says Greg Zeeman, HSBC Singapore head of personal financial services: 'Our credit card business is growing at a healthy and sustainable rate, in line with our expectations and market growth.
'We anticipate that credit card spending will stay strong on the back of growing consumer confidence and the recovery of the economy.'
Not to be outdone, Citi Singapore, with over one million cards in circulation as at last week, launched a new Everyday card which gives rebates anywhere, anytime for absolutely anything.
'As the economy improves and salaries rise, consumers have greater disposable income to pay down their purchases on credit cards,' says Han Kwee Juan, Citi managing director and head of credit payment products.
'At the same time, we believe that consumers are prudent about the way they spend their money and they see spending on credit cards as a means to offer them the most value in terms of privileges, discounts, rewards or cash back.'
