Visa expands RI operation with new card

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)