CTBC Bank (中信銀行), the nation’s largest credit card issuer, yesterday entered into an alliance with the biggest local hard discounter, PXmart (全聯福利中心), and expects the partnership to secure its leadership position and boost credit card charges by 6 percent next year.
The alliance came months after CTBC Bank, the main subsidiary of CTBC Financial Holding Co (中信金控), lost a major partner, Costco Taiwan, to Cathay United Bank (國泰世華銀行), which is courting the wholesale club’s 900,000 local customers through an exclusive cooperation.
“Starting Jan. 1, CBTC Bank cardholders may pay for goods purchased at PXmart nationwide — transactions that have been limited to cash for the past 15 years,” bank chairman Tung Chao-chin (童兆勤) said.
The cross-sector cooperation may allow CBTC and PXmart customers more shopping convenience and easier shopping, Tung said.
With 678 outlets across the nation, PXmart has 7.08 million members, who are expected to contribute NT$70 billion (US$2.37 billion) in revenue this year, Chuan Lian Enterprise Co (全聯實業) chairman Lin Ming-hsiung (林敏雄) said.
Chuan Lian Enterprise operates PXmart.
The discount store chain aims to increase its number of outlets to 1,000 in the next five years, Lin added.
“Teaming up with CTBC Bank may facilitate transactions at PXmart,” whose members are relatively loyal, Lin said.
CTBC Bank expects its credit card charges to increase by NT$20 billion next year, or up 6 percent from an estimated NT$330 billion this year, said Frank Hsu (徐鋒志), senior vice president at the bank’s cards and payment office.
The figures are based on a 30 percent penetration rate among PXmart shoppers, which is a rosy projection because plastic-money penetration rates remain low in Taiwan, accounting for only 24.8 percent of overall retail sales, according to government data. Plastic money is even less popular among supermarket shoppers, representing only 9.9 percent of transactions, as shoppers prefer to pay in cash.
CTBC Bank plans promotions featuring prize draws and discounts to attract PXmart customers, Hsu said. It is seeking to retain Costco customers through co-branded credit cards with American Express Inc so they can continue to use their credit cards to shop at Costco, Hsu said.