State-run Chang Hwa Commercial Bank (CHB, 彰化銀行) yesterday issued a new credit card that offers up to 6 percent in cash rewards for online spending as it seeks to tap into digital banking and woo younger customers.
The scheme made CHB the most generous in cash rewards among card issuers in Taiwan as people increasingly transact via computers or smartphones.
“The latest card falls in line with our strategy to court young customers, who do not visit physical banks nowadays,” CHB chairwoman Joanne Ling (凌忠嫄) told a news conference.
With 185 branches, CHB cannot afford to ignore the trend, but has made adjustments to stay competitive, Ling said, adding that the century-old bank decided to launch a credit card with higher cash rewards.
Credit card spending rose by a double-digit percentage in the first half of the year, despite an ongoing economic slowdown, MasterCard Inc country manager in Taiwan Eva Chen (陳懿文) said, attributing the fast increase to the popularity of credit cards featuring cash rewards.
CHB expects to issue 100,000 of the cards by the end of this year, raising its total number of cards in circulation to half a million, Ling said.
The goal is achievable as cardholders do not have much loyalty, Ling said.
The card is aiming to boost retail banking at CHB that used to focus on corporate lending, but now favors a more balanced contribution of income sources.
Retail banking generates 35 percent of revenue, suggesting room for improvement, compared with corporate banking’s 65 percent, Ling said.
The card would particularly appeal to people who enjoy traveling, and shopping at home and abroad, as it offers cash rewards of 3.5 percent on overseas spending without restrictions on outlets, Ling said.
Other banks limit cash rewards to a modest amount, she said.
The card would allow CHB to integrate its electronic payment system and digital savings accounts, and hopefully the convenience would attract and retain younger customers, Ling said.
The strategy is also part of the bank’s answer to the arrival of Web-only banks, she said.
The number of digital banking accounts hit 1.5 million last year, surging 2.8 times from a year earlier, thanks to the prevalence of smartphones, Chen said.
Mobile payments reached NT$19.8 billion (US$636.84 million) in the first quarter of this year, higher than the whole of 2017, Chen said.
Cross-border shopping accounted for about half of overall transactions, lending support to credit card spending, she added.
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