BNI expects 40% growth in credit card transactions

Novia D. Rulistia ,  The Jakarta Post ,  Jakarta   |  Tue, 02/26/2008 12:49 PM  |  Business

Bank Negara Indonesia (BNI), the country's third largest bank, is targeting a 40 percent increase in the volume of credit card transaction this year.

BNI general manager for credit cards, Sahala Oloan Manik, said Monday that to reach the target, the bank was hoping to increase its credit card users to 1.7 million this year, up from 1.3 million users in 2007.

Last year, he said, the bank booked around Rp 7 trillion (US$765.86 million) in credit card transactions.

The bank will also modify its credit cards from swipe mode to chips.

"We will spend US$12 million for the conversion program, $2 million of which will be used to change the cards, and the remaining $10 million to change 20,000 electronic data cards (EDC)," he said, adding that one EDC unit cost around $400.

To support credit card growth, the bank hopes to increase the number of its EDCs to 50,000 in stores here and abroad, from the current 25,000 card readers.

Sahala said the conversion aimed at increasing the security of credit cards by adding early detection units for suspicious cards used during transactions, to prevent credit card fraud.

He said that with the new system, BNI could better control customer transactions.

Sahala said the bank has converted 52,000 cards since January, and would change 600,000 more cards this year, while the remaining cards would be converted gradually through the end of 2009.

In 2007, BNI had 11 million customers, including nine million with savings accounts and 1.3 million credit card users. The remaining were the bank's lending customers.

Nationwide, 9.2 million people owned credit cards last year, up from 8.21 million in 2006.

As of December last year, the country had 19 banks and one non-bank financial institution issuing credit cards, with the largest issuers being Citibank, Bank Mandiri, Bank Central Asia (BCA), BNI and bank HSBC.

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