MasterCard upbeat on RI prospect

JAKARTA (JP): MasterCard International is bullish that it can sustain its debit and credit card businesses' high growth rate in Indonesia, a senior executive of its Singapore-based Asia Pacific headquarters said yesterday.

MasterCard's senior vice president for acceptance development, Jonathon Gould, said the Indonesian market, like the rest of the region, was far from being saturated.

Gould, who was appointed in November, is in Jakarta to talk with MasterCard's 20 clients in Indonesia -- 18 banks and two non-banking financial institutions -- about expanding its networks, including electronic commerce.

MasterCard bolstered its Indonesian operation this year when it enlisted Bank BNI as a client. Bank BNI, the biggest state bank with networks across the country, became the first Indonesian state-owned bank to join in the international credit and debit card businesses.

The director of MasterCard's operations in Indonesia, Iwan Notowidigdo, said Indonesia's other six state-owned banks were expected to join in the international credit card businesses.

The number of Mastercard holders in Indonesia grew 37 percent last year, while transaction volume rose 38 percent, Iwan said.

He estimated that about 1.2 million Indonesians have credit cards, and this is rising with the country's prosperity.

Besides credit cards, MasterCard International operates cash and debit cards under names Maestro and Cirrus.

Banks in Indonesia, which offer credit and debit card services, usually require a person to earn at least Rp 800,000 (US$333) a month to be eligible for the cards.

MasterCard is looking to expand into new categories of acceptors besides the traditional ones such as hotels and restaurants, Gould said.

The payment of telephone and electricity bills were prime examples where MasterCard payments could be accepted, he said.

MasterCard plans to launch wireless and off-line transaction facilities in Indonesia this year.

MasterCard International is pioneering the use of Security Electronic Transaction, addressing concerns that transactions through the Internet are unsafe and are prone to abuse.

Gould said MasterCard's main competition was not from Visa credit cards, but from cash, which was still the main form of payment.

Innovation and technological development were the two main factors driving growth in the credit and debit card businesses, he said.

Gould said some traders in Indonesia had not yet adopted the standard practices of credit card payments, and still requiring cardholders to pay extra charges -- often three percent -- to use their cards.

This was changing with banks educating traders on standard practices, he said. (emb)