CHANGE OF FOCUS
Visa relaunches debit card ... for some
Visa International Thailand yesterday relaunched its Visa debit card with a Bt40-million marketing campaign.
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Visa International Thailand yesterday relaunched its Visa debit card with a Bt40-million marketing budget for this year, aimed at attracting disciplined spenders who avoid using credit cards for fear of building up huge debts.
The slowing economy is seen as an opportunity for the company to relaunch the debit card, first introduced to the Thai market seven years ago, because credit-card spending has shown a slight drop. "With an uncertain economic environment, consumers avoid using credit products. They're afraid to become bad borrowers. This is the right time to stimulate the debit-card business," said country manager Somboon Krobteeranon. The company cooperates with Thailand's eight Visa debit-card issuing banks to run promotional campaigns. Somboon said Thai consumers had not really understood the features of a debit card. As a result, they prefer to use the card to withdraw cash from automatic teller machines (ATMs) rather than pay for goods or services with it similar to a credit card. But, unlike credit cards, debit cards are a perfect tool for disciplined spenders: spending is limited to the balance in a user's bank account. In Thailand, 95 per cent of debit-card use is for cash withdrawals and only 5 per cent for payments. By contrast, the proportions in the UK and the US are 60-40 and 50-50, respectively. The company expects payment by debit card in Thailand to increase to double digits in the next few years. Thailand has around 17 million debit cards, of which 12 million are Visa and the rest MasterCard. Somboon said the company planned to issue 3 million new debit cards this year, an increase of around 30 per cent from last year. Spending by Visa debit card is also expected to grow 30 per cent. Spending volume on Visa debit cards in this year's first quarter was Bt4.5 billion, up 20 per cent from the same period last year. Somboon said the debit-card business in Thailand had a high growth potential, partly because of the growing number of credit-card applicants who failed to meet the central bank's regulations. It is possible fees would be cut to make debit cards more competitive with credit cards. Presently, debit-card customers pay an annual fee, Bt150 on average, but most credit-card issuers charge no fee.
Somruedi Banchongduang The Nation
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