Visa, BCA join forces to offer Visa/Plus network in Indonesia
JAKARTA (JP): Indonesia's Visa cardholders, as part of consumers around the globe, are now able to secure cash advances from any Automated Teller Machine (ATM) operated by Bank Central Asia (BCA), one of the country's leading banks. This facility is being offered so that Indonesia does not lag behind other countries in the payment card industry, a system which was created some three decades ago.
Credit cards -- plastic money -- have become an integral part of most people's lives. Whether they are used for credit or debit, for travel or at home, for purchases or at ATMs, owning a payment card opens up a whole new world of possibilities.
BCA, with the largest ATM network in the archipelago, has inked an agreement with Visa International, the world's largest payment system, to deliver greatly increased ATM access for Visa cardholders, particularly in Indonesia.
The agreement allows BCA's 1,800 ATMs to be fully linked with the Visa/Plus global network, comprising over 457,000 ATMs in 120 countries.
Formerly, only Visa plus cards issued overseas could be used to obtain cash advances from BCA ATMs. This service has now been expanded to include Visa plus cards issued in Indonesia, of which there are currently more than 1.3 million in circulation.
In addition, BCA ATMs will also accept Visa Electron cards. Visa Electron, Visa's global electronic deposit access product, was launched in Indonesia earlier this year, with the first Visa Electron cards due to be issued in a near future. Visa Electron will be accepted at 48,000 merchants throughout Indonesia, including BCA merchants.
BCA's vice division head of consumer banking, Th. Wiryawan, said the new service would assist both domestic and overseas users.
"Through this service, foreign visitors to Indonesia can withdraw rupiah at any time. ATMs are generally operating around the clock, 7 days a week. But, as there are still some merchants who do not take credit cards, cash is needed in some cases. People do not have to wait for working hours if they need to get Rupiah immediately," he said, adding that they would also gain benefits in exchange rates.
Withdrawing cash at ATMs can save international travelers' money and make it easy to take advantage of favorable exchange rates offered by ATMs, he said.
Cash withdrawals are usually dispensed in the local currency and debited from users' accounts in their home currencies. This eliminates additional currency conversion fees and commissions often assessed by traditional currency exchange bureaus. It is also often less expensive than changing currency at a hotel, airport or other local currency exchangers.
"Now, Visa cardholders, particularly those from overseas, do not have to carry wads of cash because BCA's ATMs are conveniently located for easy access," Wiryawan said.
Visa International Country Manager for Indonesia, Ellyana C. Fuad, said that the exchange rates would be calculated based on the value of the dealing day or the next working day if the dealing day is a holiday.
ATMs operated by BCA can be found in many public locations, including on street corners, in shopping centers, in lobbies or arrival lounges of travel facilities, such as hotels, airports and railway stations, and many other spot in major downtown centers.
"People can easily find the nearest BCA ATM. Just look for the ATMs with a Plus sign wherever they are traveling," Wiryawan said.
Fuad said BCA's decision to provide ATM access for the Visa/Plus network carried a tremendous significance for the Indonesian payment industry.
"It is vital for any market to provide local and overseas customers with easy access to ATMs. The combination of BCA's domestic strength and Visa's global Plus network provides Visa cardholders with a clear advantage when it comes to ATM access in Indonesia," she said.
Synergy
Wiryawan said nowadays there must be synergy in most aspects of life, including in marketing.
"This is a kind of 'cooptation', a collaboration with the rivals. Working alone as a belief does not exist anymore, that's why we cooperate with Visa for synergy," he said.
He said the synergy offered various advantages.
"We expect that the local Visa cardholders will enjoy this new facility and then consider becoming BCA's customers. In addition, this represents a global partnership," he said.
"In the world of electronic commerce, networking is important. We have to optimize our existing ATM network. With a minor adjustment in the software, we can provide this service," he said.
This synergy is also evidence of our commitment to providing consumers with access to world-class banking and payment facilities, he added.
"The basic concept of such synergy is public utility facilitation. So far, BCA has cooperation with a number of companies to assist the public in paying several bills, including electricity, telephone, mobile phones and credit cards," he said.
He added that through the new service with Visa, Indonesia now can provides a safe, quick and convenient way to access cash as offered worldwide.
The only problem that may occur is in ATM's down time.
"Out of its 24-hour operations, an ATM will be down about 40 minutes. This is for cash replacement.
BCA also plans to expand its ATM network. We are preparing up to 300 new ATMs to be installed by 1999," Wiryawan said.
Fuad said that such synergy would also accelerate Visa expansion in Indonesia.
"Our major rival is cash money. We want more people to carry cards and substitute the cash. It's more convenient to carry cards than cash," she said.
Wiryawan said there would be transaction fees imposed.
"Visa has set US$1.50 per transaction for users with cards issued locally and US$2.25 for users with overseas financial institution issuers. BCA will then charge the fees to the card issuers, with customers' bills showing various fee amounts depending on the rates set by the issuers," he said.
According to Fuad, the transaction fees were set based on international standards.
She stressed that the charges imposed on customers by card issuers would be much lower than the transaction fees.
"Sometimes there is even no charge for the customers," she said.
There are two types of cards that can be used at a BCA ATM: the one issued locally and those by overseas issuers.
"A credit card issued locally would be served with a cash advance from the user's credit line. This means the users will owe money to the bank which issue the card," said Wiryawan.
"Users with cards from overseas issuers will have the transaction as a debit from an account or a cash advance, depending on the type of the card," he said.
He said there may be limits on how much cash a user would be able to withdraw or a spending limit set per day.
Leading
The two companies are indeed creating solid synergy, as both are prominent leaders in each own's segment.
Visa is an international brand of payment cards issued by more than 21,000 member financial institutions around the world. There are over 620 million cardholders worldwide.
For more than 20 years, Visa has become the world's leading full-service payment network.
The number of Visa branded cards in the Asia-Pacific region grew to a record 112.9 million by March 1998, up by 10 percent compared to the same period in the previous year. The number of transactions carried out on Visa branded cards in the region reached 1.18 billion -- an increase of 34 percent year on year.
Fuad said that Visa controlled 63 percent of the market share in Indonesia's competitive payment card business.
"We expect to reach 80 percent of the market share next year," she said.
She said that there were some 15 million transactions with Visa cards in Indonesia annually, of which 20 percent are made by foreign travelers.
As the world's best way to pay, Visa is the leading payment brand and the largest consumer payment system with more volume than all other major payment cards combined. Visa plays a pivotal role in advancing new payment products and technologies to benefit its member financial institutions and their cardholders around the world.
More than 15 million locations accept Visa cards. Consumers using Visa-branded cards generated more than $1.2 trillion in annual volume.
Headquartered in San Francisco, California, Visa traces its history back to 1958, when the Bank of America started its BankAmericard program. In the mid-1960s, Bank of America began licensing banks in the U.S. to issue its Blue, White and Gold BankAmericard. Membership associations were created both in and outside the U.S., and in 1977, the name Visa was adopted internationally. It was the world's first common identity for multibank recognition, acceptance and interchange of value.
BCA was set up in February 1957. Having gone through extremely rapid development in recent years, BCA has also incorporated a number of financial-related subsidiaries with leading international partners.
In 1987, BCA became the first bank in Southeast Asia that gained trust from Visa International to distribute BCA Traveler Checks that are accepted all over Indonesia.
With the support of sophisticated technology, BCA is, up to now, the bank with the widest ATM network, which covers hundreds of cities in Indonesia. The bank also has overseas representative offices in New York, Hong Kong, Nassau and Singapore.
New technology also allows BCA to implement an integrated banking system, which makes it possible for clients to make various transactions anywhere by taking advantages of some 800 branch offices and its 1,800 ATM facilities throughout Indonesia.
Wiryawan said that BCA, which employs over 20,000 people, currently has a portfolio of eight and a half million clients, five million of which are ATM cardholders.