Taishin spurns `combo' cards with new launch

Several local and foreign banks have been scrambling to launch chip-embedded combo cards recently to woo consumers, but at least one lender has thought otherwise -- partly because of cost concern amid stiff competition.

Taishin International Bank (台新銀行) yesterday launched a traditional credit card product that allow customers to showcase their own designs.

In cooperation with Visa International and UK-based Serverside Graphics Ltd, the "imake" cards target young people who would have an interest in a personalized card, said Taishin's senior vice president Amy Hsia (夏敏蘭).

"How to diversify the product would be the key to boost competitiveness," Hsia said.

A chip embedded in a combo card functions like a computer's hard disk and can save a cardholder's information or issuers' loyalty programs. Such chips, which cost between US$0.99 and US$3 each, depending on the storage size, can help prevent card fraud.

Taishin decided not to use the chips so as to reduce production costs, Hsia said.

Still, the bank charges NT$200 for each "imake" card issued, but has no restrictions on how often cardholders can change the design on their personalized cards, she added.

Taishin's public relations official Sarita Hao (郝名媛) said old banks with fewer credit cardholders generally choose to issue the combo cards, which combine a wide range of applications and can be used as both an ATM and credit card.

As Taishin has snared a whopping 10.7 percent market share, ranking it No. 2 among the nation's 54 credit card issuers, Hao said the bank prefers to concentrate on launching new products, instead of following the trend to push combo cards.

According to the Financial Supervisory Commission's regulations, banks have to replace magnetic-strip cash-withdrawal cards with more secure integrated-circuit (IC) cards by the end of this year. The same stipulation applies to credit cards with the deadline set at the end of 2006.

But the regulations have met with financial institutions' slower-than-expected progress in ATM card replacement. Some major credit card issuers, likewise, are not eager to take the lead in launching chip cards.

"Embedding chips on credit cards would increase costs for banks," said Victor Kuan (管國霖), head of Citibank Taiwan's consumer banking.

"Card fraud can be prevented in many other ways, rather than just depending on chips," Kuan said in August when the bank re-launched its "Diamond Preferred Cards," which don't have the chips.