The Bank Credit Card Business is Still Unmoved by the Faster Pay Later Feature

The Bank Credit Card Business is Still Unmoved by the Faster Pay Later Feature
The age of technology brings a lot of fresh air to the industry. The banking industry is no exception. Banking can now enter market segments that were previously difficult to reach. Not only that, banks can also operate effectively and efficiently by using technology.

However, like a double-edged knife, the technology also gave birth to new competitors for the bank. This is the emergence of financial technology companies (fintek). The banking market was also annexed, starting from the payment market, non-cash to the credit market share.

One banking service whose market is now being annexed is the credit card business. Because the payment fintek company has a new feature called pay later.

Even so, a number of banks contacted by said that the credit card business was still superior. In fact, the Head of the Business Card Division of PT Bank Negara Indonesia Tbk (BNI) Okki Rushartomo said the presence of fintech gave new banking ammunition.

"In the past, banks took a very long time to encourage technology literate customers. With the availability of fintek, from the old to the young one has now begun to understand," he explained when met in Jakarta on Thursday (12/19).

However, Okki did not dismiss that the pay later feature of fintek was superior to banking in terms of ease and speed of registration. Even so, it did not stay silent. Bank BNI has also discussed with Bank Indonesia (BI) to facilitate credit card applications.

As a result, BI approved the digital signature feature for credit card applications at BNI next year. Practically, next year the bank with the 46 logo will push credit cards into digital applications.

"With the digital signature, next year we are targeting more than one thousand cards per month to submit digitally," he continued.


In addition, it is expected that with the digital acquisition cost of new customers it can go down by 50%. If this is realized, BNI will allocate the cost reduction to various promotions to further boost the credit card business. This bank also has ambitious targets. This year and next year it is expected that the number of users of the company's credit cards can rise by 400 thousand users. Meanwhile, until November 2019, BNI had 1.86 million credit cards. Meanwhile, since January-November 2019 it has been able to print 360 thousand new cards. This year, BNI pegged the credit card business to grow by 6% in a portfolio. While in terms of transactions, annual growth is still 10%. "The possibility of next year will grow around in the early teens (double digits)," he explained. Similarly, PT Bank CIMB Niaga Tbk Consumer Director Lani Darmawan said that so far credit card growth was still good, reaching 11% yoy on average. Next year, CIMB Niaga also estimates that the credit card business will continue to grow. Regarding the existence of new competitors in the credit card business, Lani claimed not to worry. For the company, the presence of fintek has become a new catalyst for the development of a non-cash transaction culture. At the same time, fintek is considered capable of expanding access to financial products including installments. Besides, according to Lani, the banking segment with fintek is different. For example, a credit card business has a ticket size from small to large. Similarly, in terms of lower interest rates and tight security. "We see that fintek attracts more customers who are not taken by banks. Ticker size is smaller but does not mind high interest," he told, Friday (12/20). Meanwhile, the current number of CIMB Niaga credit card users is also quite high reaching 2.7 million cards. Equivalent of three money, PT Bank Central Asia Tbk (BCA) through BCA Director Santoso Liem said that so far the volume of BCA credit card transactions is still growing rapidly and continues to increase. "We expect around 10% -11% by the end of 2019," he said. Also, BCA may be calmer in the face of competition. Because the largest private bank in the country has a number of credit card customers reaching 4 million users. The existing customers are considered by the company to be supporting the growth of the credit card business next year.

Meanwhile, the pay later feature has not been seen as a competitor for BCA to fear. However, not without preparation, BCA has also rolled out various programs for credit card users who continue to roll every year. For example, there is a prize or reward for each transaction, up to 0% installments using a BCA credit card.

Just for additional information, referring to BI data as of November 2019 there were already 17.38 million credit cards. This number increased from the new December 2018 of 17.27 million cards.

Source: Kontan

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