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Andhi Wahyu just received his first premium credit card. The human resources consultant said that when he received a phone call from Bank BNI in July, he could not say no to the idea of a third credit card with a larger credit line and lots of privileges.
“I get special access at the airport and the lounge. No more hassles and no more long waiting lines. I can get my hands on many electronics and fashion discounts,” the 29-year-old said.
A person like Andhi, who says his monthly income is in the “dozens of millions of rupiah”, is a big catch for big-time credit card issuers such as BNI, Citibank, Bank Mandiri, BCA and CIMB Niaga.
After expanding their market base in the last decade, big banks and smaller players have been vying for customers from the rapidly growing ranks of affluent Indonesians.
There are currently more than 7 million cardholders and 15 million credit cards issued by 19 institutions, mostly banks, in Indonesia. Premium accounts comprise 30 percent of the total number of cards, according to the Indonesia Credit Card Association (AKKI).
Thanks to the strengthening economy, the number of credit card holders and transactions has increased by 15 percent over the last three years, AKKI general manager Steve Marta said.
Premium credit cards are aimed at people with minimum monthly incomes of between Rp 20 million (US$2,120) and Rp 25 million, depending on a specific bank’s policies.
Banks typically employ a two-tier strategy, according to Steve. First, they target first-time customers to “get into their wallets”, and later encourage customers to use their cards more often by offering exclusive privileges.
BCA, for example, offers discounts with high-end lifestyle merchants, including those in the travel, hotel, airline, fine dining and branded goods business. The bank offers six premium credit cards with credit limits up to Rp 100 million.
Holders receive privileges when shopping for international brands, such as Gucci and Bottega Veneta, BCA senior credit card general manager Santoso said.
“Since holders still use their cards mostly for purchasing groceries and gasoline, we offer promos at supermarkets and gas stations.
“Our number of young executives and professionals grows each year. We expect this segment to contribute 25 percent to our credit card transactions,” Santoso said.
BNI also offers discount services aimed at the rapidly growing premium market segment. “Our choice of partners sets BNI apart from its competitors. We team up with lavish boutiques, such as Jean-Paul Gaultier and Biyan,” BNI credit card general manager Dodit Wiweko Probojakti.
BNI offers four credit cards for premium customers, including one offered by invitation only, with a Rp 200 million limit.
“We’re aiming at issuing 240,000 premium credit cards by year end, a 12 percent increase from last year,” he said. BNI issued 180,000 premium credit cards as of March, 10 percent of its total number of cards, the bank reported.
Bank Mandiri said it has issued 375,000 premium credit cards, or 15 percent of its total number of credit cards. In the first half, it saw a 23 percent jump in its number of premium credit cards from a year before.
“Our customers use the cards mainly to make purchases at department stores or boutiques, supermarkets, cafes or restaurants, electronics stores and hotels,” Bank Mandiri senior vice president Handayani said in an email sent to The Jakarta Post.
Among the big players, Citibank is missing out on the booming premium market due to a two-year ban on recruiting new credit card customers imposed by Bank Indonesia in 2011 following a major scandal involving one of its top managers.
The ban has not stopped Citibank from promoting its services to its 1.5 million existing cardholders. (tas)