Visa expands RI operation with new card

JAKARTA (JP): Visa International is expanding its operations in Indonesia despite the economic crisis, and it is planning a major campaign in May to promote its new Electron card, its representative here said on Wednesday.

"We're here to stay, regardless of the economic situation," Visa International country manager Ellyana C. Fuad said.

"The demand for payment service facilities continues to increase in times of economic crisis," Ellyana said, citing as an example the growing trend for people to avoid carrying too much cash around because of the political situation in the country.

The Electron card allows users to shop and charge purchases directly to their bank accounts.

While some Indonesian banks have already offered this facility in cooperation with selected merchants, Visa Electron will have a wider network of merchants throughout the country, Ellyana said.

"These cards will become available to customers at virtually no additional cost," she said, adding that anyone with a savings or current bank account would be eligible for the facility.

The facility has already had a soft launch in December with the state-owned Bank Negara Indonesia (BNI). Indonesia is the first Southeast Asian country for the card to be launched in.

"We plan an aggressive campaign in May," Ellyana said.

Visa is vying for 12.5 million Electron card customers within five years, she said.

Banks offering this facility do not stand to immediately gain a lot, but will reap rewards in the long run, she said. "It creates high loyalty from card holders and close bonds with the banks."

Visa is also launching in Indonesia later this year the COPAC (Cheap Off-line Pre-Authorized Card), a card offering various payment facilities, Ellyana said.

COPAC has already been launched in Russia and South Africa, and Indonesia will be the first country in the Asia Pacific region to be provided with the facility.

COPAC is suited to countries with limited telecommunication networks, she said, saying the system is "very secure".

"So, in spite of the crisis, Visa International has come up with a lot of breakthroughs. In fact, Indonesia is first for some of the new products," she said.

As a gesture of its commitment to Indonesia, Visa International is involved in a fund-raising campaign to help six- graders from poor families complete their schooling and sit the examinations this month, she said.

Ellyana admitted that the credit card business in Indonesia had been stagnating because of the economic crisis.

"The credit card business is more challenging. The opportunity is there, but we have to be more selective, segmented and more focused," she said.

With 1.3 million credit card holders in Indonesia, Visa claims it has a 66 percent share of the credit card market.

A total of 20 Indonesian-based banks now offer the Visa credit card facility.

The economic crisis has had some impact on the collection of payments for credit cards.

Industry-wide, the delinquency rate -- those failing to pay their accounts within 30 days -- reached 18 percent. "This is relatively high," she admitted.

The size of bad debts has doubled to around 0.02 percent, she added. (emb)