Visa expects zero growth this year
JAKARTA (JP): Visa International expects zero growth in the number of cardholders in Indonesia this year, but in terms of transaction value the credit card company estimates an increase of 15 percent.
Ellyana C. Fuad, Visa International country manager for Indonesia, said on Monday that the increase in the transaction value was mainly due to the country's high inflation rates.
Ellyana said that the inflation rate, which reached 75 percent for the 10 months ending in October, pushed up people's expenditures.
She also said that the country's political and social uncertainty had caused more people to make transactions with credit cards rather than with cash.
"More people now prefer to have more security in settling their business. Using cards, both credit or debit, will minimize the risks," she said following the announcement of the company's new deal with Bank Central Asia (BCA).
Visa agreed on Monday to link BCA's 1,800 automated teller machines (ATMs) in Indonesia to the Visa/Plus global ATM network.
Under the agreement all Visa cardholders will be able to secure cash advances from any one of BCA's 1,800 ATMs, the largest ATM network in Indonesia.
In addition, BCA ATMs will accept Visa Electron cards, a new debit card launched in June, which, like a credit card, will allow holders who have bank accounts to settle their transactions without cash.
Ellyana said that Visa's agreement with BCA builds on the company's commitment to provide Indonesia with the third largest Visa/Plus ATM network in the Asia Pacific.
She also stated that Visa recorded growth in sale's volume and numbers, reflecting a continued tendency in the Asia-Pacific region to replace existing cash and check payments with credit card payments.
The number of Visa cards in the Asia-Pacific region grew to 112.9 million for the 12 month period ending in March 1998, while the total transaction volume reached US$186.6 billion, a 10 percent and 28 percent increase respectively, over the same 12- month period.
Ellyana said that Visa's member banks in Indonesia have proved able to handle transactions from both cardholders and merchants despite the economic crisis.
"Our member banks in Indonesia continue to meet all of Visa's requirements and we continue to maintain a close relationship with them," she said.
Visa, which began operations in Indonesia 15 years ago, estimates that Indonesia has over 1.7 million credit cards in use, 1.3 million of which were issued by Visa.
Worldwide, the company claims to be the preferred brand of credit card. It has issued 620 million cards which generate over $1.2 trillion annually in transaction volume. Visa cards are accepted at more than 15 million locations worldwide, including 450,000 ATMs in the Visa Global ATM network. (gis)