Strategy

Banks Turn To Credit Cards To Tap Asia's Affluent

Tara Loader Wilkinson, Asia Editor, Hong Kong, 9 February 2012

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American Express and the leasing arm of Australian lender Macquarie have tied up to launch an initiative allowing cash-strapped entrepreneurs to finance themselves using their Amex card.

American Express and the leasing arm of Australian lender Macquarie
have tied up to launch an initiative allowing cash-strapped entrepreneurs to finance themselves using their Amex card, the latest example of an Asian bank sweetening its offer with niche credit cards. 

Antipodean business owners can now pay for their commercial equipment and
vehicles through their American Express card. The programme is a global first for American Express within the commercial equipment finance space, and Macquarie
Leasing
is the only institution in the market to accept plastic for new
commercial vehicle and equipment finance repayments.

As part of the offer, Macquarie Leasing will accept
American Express for monthly payments for new commercial hire purchase, chattel
mortgage and finance lease agreements. Macquarie Leasing also has the ability
to source cars and insurance products on behalf of American Express card
members.

"This is a great opportunity for business owners to
diversify the way they pay for their business equipment needs - from car to medical
equipment finance arrangements. In addition, business owners can benefit from a
convenient method of payment with the added advantage of being able to extend
their cash flow,” said Joanne Sully, vice president, global merchant services,
American Express.

"Business owners can now use their American Express Card to
pay for commercial vehicle and equipment finance repayments and in doing so,
will earn more Membership Reward points - which can ultimately be put back into
their business,” she added.

"Macquarie Leasing is delighted that we can assist
Australian businesses by expanding the range of vehicle and equipment financing
solutions available in the market, a result of our continued commitment to SMEs,”
said Andrew Sidery, head of Macquarie Leasing specialist sales.

It is the latest example of a bank offering a sweetener to new
and existing clients through its credit cards - in what could be a worrying trend, given the fresh memories of the global credit crunch. Global banks invested heavily in
Asia-Pacific during the boom years, and many are finding their cost to income
ratios are growing uncomfortably high. In a bid to grow new assets, several are
seeking to expand their loans pool, offering privileges to loyal customers
through credit cards. 

US lender Citi's Hong Kong division this week sealed a partnership with
lifestyle concierge firm Ten Group, available to all of its clients with an
Ultima card. The Citibank Ultima Card is strictly by invitation. Customers normally will have at least HK$8 million($1 million) AUM with the bank or HK$3 million annual income. Finance charge is 2.33 per cent per month. APR is 31.89 per cent (retail spending); 33.61 per cent(cash advance).

Citi also separately announced it had gained approval to offer its
credit cards in China, as one of the first foreign lenders to get the green
light.

In December UK-listed Standard Chartered’s Islamic banking arm
rolled out Islamic financial services, including credit cards, for its clients
in the Middle
East.

Meanwhile India’s HDFC Bank
also in December launched premium credit cards targeting female clients.

The new card,
Solitaire Premium, has a credit limit of nearly $10,000. The lender said it
wants to increase its credit card clientele by 4 million over the next two
years – or 10 million credit cards.

The bank is currently the biggest issuer of credit cards in the
country and has around six million credit card customers, 1.5 million of whom
are women.

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