Taiwan Becomes Biggest Market For Top-Grade Credit Cards

Dec 30, 2003 Ι Industry In-Focus Ι Furniture Ι By , CENS
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Over the past year Taiwan's Taishin International Bank has been engaged in an intensive marketing campaign for Visa International's "Infinite" card. One of the top credit-card issuers in the world, Visa has marketed about 20,000 such cards around the world to date. In just the past twelve months 5,114 Infinite cards have been issued in Taiwan, a quarter of the total world market.

The Visa Infinite card is the most valued card in Visa's stable, a step above and thus even more prestigious than its popular Platinum and Gold cards. Taishin issues the Infinite cards to local applicants whose annual income is more than NT$2 million (US$58,800 at US$1:NT$34); a cardholder is required to pay an annual fee of NT$20,000 (US$590). Among the slew of benefits and perks that come with possession of the card is compensation of NT$50 million (US$1.47 million) to a holder's survivors in the event of fatal accident while traveling, and entitlement to free parking at local airports when off on overseas trips.

Several other local banks are now also aggressively promoting the card to identified high-income earners, including Union Bank of Taiwan and Makoto Bank.

Cathay United Bank is promoting the World MasterCard, which is of a higher grade than the Platinum MasterCard, with a package of benefits that includes NT$100 million (US$2.94 million) in travel safety and accident insurance as well as medical-treatment and plastic-surgery discounts at Cathay Hospital.

Far Eastern International Bank is currently promoting both the World MasterCard and Visa Infinite card.

Chinatrust Commercial Bank is currently promoting a package of three top-grade credit cards, including the World MasterCard, Visa Infinite card, and American Express Platinum card, charging combined annual dues of NT$20,000 per client.

As competition among the various card marketers steadily increases in intensity, fees have been declining. For example, applicants are not charged any fee in the first year by Far Eastern International Bank and Makoto Bank. A client of Far Eastern International Bank will not be charged an annual fee in the event the client buys NT$300,000 worth of goods or services in a year using a credit card issued through the bank.

Taishin and Cathay United Bank offer reduced annual fees to holders of the Visa Infinite card and World MasterCard who already have asset-management accounts with the banks. Taishin offers a deduction of NT$5,000 (US$147) and Cathay a deduction of NT$10,000 (US$295) from the stated annual fee of NT$20,000 (US$590) per client.

In terms of annual income requirements, Far Eastern International Bank requires a minimum annual income of NT$1.5 million (US$44,000). The strictest issuer in terms of requisite annual income is Chinatrust Commercial Bank, which requires that each holder of the three credit cards it handles-- Visa Infinite, World MasterCard , and American Express Platinum--has an annual income of NT$5 million (US$147,000).

Bundling a credit card with special privileges and benefits has been a major tactic for local banks to increase its market share. In addition to free parking for the first hour at 50 parking lots throughout Taiwan, Taishin also bundles its Visa Infinite card with discounts at selected golf courses in Taiwan. Union Bank of Taiwan offers cardholders discounts at the Breeze Center in Taipei, one of the top malls in Taiwan.

Taishin has issued about 3,000 Visa Infinite cards to date, and Far Eastern 2,000 top-grade cards of various sorts. Each of the other banks have tallies in the hundreds. Signing up as many holders of the premium cards as possible is only the first step for the local banks, who are in fact more interested in attracting the asset-management business of these clients.
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