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Banks rely on e-commerce to drive credit card business
Banks are racing to boost their credit card business by capitalizing on Indonesia’s rapidly growing e-commerce platforms that provide a wide range of goods and services online
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anks are racing to boost their credit card business by capitalizing on Indonesia’s rapidly growing e-commerce platforms that provide a wide range of goods and services online.
Citibank Indonesia, the local unit of United States financial services giant Citigroup Inc., had high hopes that it could book significant growth in credit card transactions this year by banking on e-commerce platforms.
On Tuesday, Citibank kicked off its partnership with five major e-commerce players — Blibli, Bukalapak, Lazada, Shopee and Tokopedia — through which its credit card holders can purchase goods from March 1 until April 30 to get discounts for their next transactions.
“We want to maintain our engagement with our customers, which is why we are giving incentives to our customers for repeat visits and purchases,” Ramon Del Rosario, the head of cards and loans at Citi Indonesia said.
Citibank’s move to partner with e-commerce businesses is based on its optimism that Indonesia’s economy is expanding rapidly and it has increasingly become a digital savvy market.
E-commerce, which tackles sales of goods and services, has been one of the fastest growing segments in the credit card business, followed by traveling, shopping and dining.
“Earlier, we have seen rapid growth [in credit card transactions] pertaining to traveling and now to e-commerce, Ramon said.
Citibank’s credit card business growth in the third quarter of last year was flat compared to the same period in 2016, Citibank Indonesia’s CEO, Batara Sianturi, said last year.
However, it improved significantly toward the end of the year, with the bank able to meet its target, Ramon said. He declined to elaborate on figures.
To boost spending through credit cards, the lender has also been collaborating with airlines to hold travel fairs.
Meanwhile, Standard Chartered Indonesia, a subsidiary of United Kingdom lender Standard Chartered, said it had observed a surge in credit card transactions from e-commerce and traveling, although overall transactions were still dominated by dining and grocery purchases.
This prompted the bank to continue its partnership with existing e-commerce platforms — Traveloka and Blibli — to jack up transactions.
“In terms of promotions, we will change them gradually according to customers’ need,” Ruddy Martono, Standard Chartered Indonesia’s head of retail products and segment, told The Jakarta Post.
PT Bank HSBC Indonesia, the local unit of the London-based lender HSBC Group, has also teamed up with key e-commerce players to offer promotions by way of discounts and cash backs, such as “online daily deals”, “Pay Day Deals” and “Online Travel”.
