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CARDS & PAYMENTS | Cesar Tordesillas, Thailand
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Thai credit card firms want more money

Milk them dry.

This is the impression given by Thai credit card companies on what they want to do with their customers.

Credit-card issuers realized that gains from interest are shrinking as more customers pay off their balances in full to avoid unnecessary debt on their accounts.

So the card companies shifted their focus on chasing fee income ahead of interest income.

This way, they still get to corner customers who clear outstanding balance.

Kasikornbank executive vice president Chatchai Payuhanavee-chai said 45 percent of the bank's credit-card holders currently clear their balances every month, which lowers its interest income.

KBank and other credit-card operators therefore need to generate more revenue to offset lower interest income, as well as the annual expenses from campaigns.

To generate more interest income, KBank has developed the Smart Pay programme by joining with merchants to offer an attractive package, including zero interest on instalment payments.

Credit-card operators should not only get fee income from issuing cards, but also from leasing the Electronic Data Capture system to merchants, he added.

KBank does not charge an annual fee to credit-card holders, therefore having a strong relationship with merchants means more fee income. The bank currently has about 100,000 merchants using its EDC.

Thakorn Piyapan, managing director of Krungsri Consumer, said full repayment by cardholders was in line with the growing economy, and credit-card operators needed to adjust accordingly to meet income targets.

On the other hand, Tearavath Trirutdilokkul, head of credit payment products at Citibank Thailand, said fee income was now the bank's focus after interest income had slowed.

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