MASTERCARD International sees vast potential in the countrys credit card market and is optimistic of robust growth going forward, said vice-president and senior country manager (Malaysia and Brunei) Jim Cheah.
The outlook for the credit card market is pretty good. With the economic package and the containment of the SARS (Severe Acute Respiratory Syndrome) outbreak, consumer spending is expected to increase, thereby increasing the overall growth of the payment industry, he told StarBiz.
Cheah said MasterCard had over three million cards in circulation in the country as at the end of 2002, representing a more than 35% increase over that in 2001.
MasterCard credit cardholder spending in Malaysia and overseas for retail or cash advances had also grown last year the gross US dollar volume rising by over 25% to US$3.2bil compared with 2001.
For the first quarter of 2003, MasterCard's credit cardholder spending increased by about 20% compared with the same period last year, and we are optimistic of maintaining double-digit growth for the year, he said.
According to a report by Bank Negara, there has been a steady increase in credit card spending, with the number of transactions growing by 3.9% in the first quarter, on a base of 4.5 million cards.
Cheah said as consumers evolved and became more sophisticated, the company needed to progressively add value and cater to all the needs of its different customers consisting of the emerging markets (those who have yet to be eligible for credit cards), and holders of its Standard, Gold and Platinum cards.
There is much potential especially, in the Platinum card segment, as people become more affluent and want recognition and status, he said, adding that MasterCard had been continually enhancing the value and lifestyle of its Platinum cardholders by coming up with various programmes.
Some of the programmes in the pipeline in Malaysia are The Peak Platinum Series Dinner, ntv7 MasterCard Golf tournament, Special Luxury Car Previews and CBT MasterCard Car of The Year Sponsorship.
We are working very closely with our member financial institutions to look at how they can leverage on this to boost sales.
Another two financial institutions are expected to launch their Platinum credit cards in the next quarter, he said.
Currently, only Citibank Bhd, HSBC Bank Malaysia Bhd, Southern Bank Bhd, United Overseas Bank (M) Bhd and Standard Chartered Bank Malaysia Bhd were issuing the cards.
He said MasterCard currently had 50 to 60 partners in Malaysia for its Platinum card programme, and more than 100 partners overall.
According to Cheah, the company has over 30,000 Platinum credit cardholders as at 2002. The MasterCard Platinum credit card was introduced into the Malaysian market in 1998.
Our Platinum cardholders contribute about 5% to total credit card spending for the company in Malaysia last year.
Research shows that these cardholders spend eight to ten times more than normal cardholders on the average, he said.
On the Europay-MasterCard-Visa (EMV) chip migration, Cheah said it was progressing well and the company currently had about 40,000 such cards in Malaysia.
We are confident of achieving the guideline to be EMV compliant by 2006.
Several banks in the country, like Bank Islam and Southern Bank, have already launched such credit cards; and four more banks will be launching their own EMV chip-based cards within the third quarter this year, he said.
He also adding that MasterCard had 35 programme partners to support its EMV migration.
To date, MasterCard has 25,000 members worldwide and 19 in Malaysia comprising banks and financial institutions.