Mon, Mar 08, 2004 - Page 10 News List

Banks, airlines sell credit cards

BIG SPENDERS In a bid to attract more affluent customers, banks are teaming up with airlines to offer co-branded cards that give cardholders a range of benefits

By Amber Chung  /  STAFF REPORTER

Cooperating with airlines to issue co-branded credit cards has become an effective way for card issuers to attract customers with high purchasing power, boosting transaction value, industry insiders said yesterday.

"Airlines are ideal partners with which credit card issuers can collaborate on issuing co-branded cards," said Chen Mei-ji (陳明智), marketing manager at Union Bank of Taiwan (聯邦銀行), the nation's forth largest credit card issuer with 2.55 million cards in circulation.

"Besides buying flight tickets via co-branded cards, cardholders usually spend large amounts when they travel overseas," he said, adding that this was a great segment for them to expand customer base and increase spending on credit cards.

Eyeing Thailand as the nation's hottest travel destination in Southeast Asia, which attracted an average of 487,000 people annually in the past three years, the bank has teamed up with Thai Airways International to launch a co-branded card today.

Cardholders can get free upgrades, buy-one-get-one-free offers and earn air miles through their spending. Platinum cardholders can use the airline's VIP lounges at airports.

This is a win-win situation for both parties: Thai Airways can promote itself and its country to more Taiwanese people and the bank can expand its customer base through the deal, Chen said.

"We hope to attract 100,000 cardholders by the end of this year," he said, adding that the airline's more than 20,000 members were all potential customers.

Union Bank is not the first one to team up with airlines. ABN-AMRO Bank and China Airlines (華航) have a co-branded card, as do Fubon Commercial Bank (富邦銀行) and Eva Airways Corp (長榮).

"Our co-branded cardholders are frequent business travellers who create higher transaction value," said Tiger Chan (詹文虎), Fubon's vice president of credit card affairs.

Fubon, Taiwan's fifth large credit card issuer with 2.5 million in circulation as of February, has issued about 60,000 co-branded cards.

"Their spending is double the average amount of about NT$3,500 per month," Chan said, adding that issuance of airline co-branded card was an effective way to boost spending per card in the overcrowded credit card market, in which many cards are inactive.

As of January, 71.7 million credit cards had been issued, but only 38.2 million cards were in use, according to the statistics from Bureau of Monetary Affairs under the Ministry of Finance.

Chan, however, questioned the efficiency of the card issued by Union Bank and Thailand Airways, as tourists, unlike business travellers, are not frequent fliers.

"Tourists may travel abroad only once a year, which would not create as much benefit as our business traveler cardholders," he said.

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