Competition in Indonesia’s credit card market just got a lot stiffer
2013 will be a year of stagnant credit card growth in Indonesia, owing to tighter regulations put into effect this January by Indonesia’s central bank. The new rules limit card ownership, dictating that people with monthly incomes between Rp 3 million and 10 million can only have a maximum of two credit cards. Banks’ profits will be hurt directly as well, as the maximum interest charged by lenders will also be limited. Foreign banks will especially be affected as they charge the highest interest rates, above 3%.
The Indonesian Credit Card Association (AKKI) predicts that this will lead to the closing of almost five million credit-card accounts. Competition among credit card issuers will be greater now that they have to compete to attract customers.
This new regulation does not bode well for Citibank Indonesia which is just about to re-enter the market after being barred from issuing new credit cards for two years.
With levels of competition rising, maintaining loyalty from existing cardholders will be of paramount importance in Indonesia’s card market.
At Cards & Payments Asia, Bank Danamon’s EVP Card Business Head, Dessy Masri, will be sharing her insights on how to better engage customers and build loyalty and trust. The two day conference will also be featuring case studies from other emerging markets like Thailand, Vietnam and China. Download the brochure or visit our website to see the full list of speakers.
Source: Jakarta Post