MasterCard targets Asia's growing band of 'super rich'

The Jakarta Post, Jakarta

Global payments company MasterCard Worldwide recently introduced its "World MasterCard" product in the region, which provides premium tailored payment services for its most affluent customers.

In Indonesia, the premium payment card will be issued in cooperation with ANZ Panin, Bank Danamon and HSBC, providing a spending limit of up to Rp 1 billion (some US$100 million).

MasterCard general manager for Southeast Asia, Ajay Bhalla, found time to talk to The Jakarta Post's Urip Hudiono about the region's credit card market during the World MasterCard official launch

for Indonesia and Singapore last week.

The following are excerpts from the interview:

How does MasterCard see the credit card market in Southeast Asia and Indonesia at present?

The credit card market in Southeast Asia is doing extremely well, because we are seeing this entire trend of people moving away from cash and checks to electronic forms of payments.

If you see, in most of these countries, cash and cheques are still the predominant means. The fact is, people still use cash and checks; it is worldwide still 80 to 90 percent of the time; in Indonesia, it is 97 percent.

So we actually have a lot of room to grow, and the future is very promising. As younger consumers enter the job market, we will see more of a trend to move from cash and checks.

All types of electronic payments, such as credit cards, debit cards, chip cards and online payments through the Internet -- all still have huge room to grow.

To what extent do you see the payments market in the region growing?

In a very advanced and sophisticated market, you can see it growing by some 40 to 45 percent. This is including Southeast Asia. But it's still not going to be the other way, that 80 percent is going to be electronic and 20 percent cash and checks -- that's still some time away, even in a sophisticated market.

So there's still room for us to grow, and that's why we're coming up with new products, new services. We're launching products that are aimed at the super rich, those at the absolute top of the country.

Is there any difference in the characteristics of the payments market in Europe, North America and Asia? What are the challenges to the growth of the market in Southeast Asia?

The (payment) markets are actually very similar all around the world.

Market penetration is, of course, always the most important thing. There are challenges in that people are culturally still coming around from using cash and checks.

So it is our job to provide acceptance, so people can use their cards. If they can use it, then they'll use the card; if they can't, then they won't.

So worldwide, we have 25 million acceptance locations where they can use the card, we have a million ATMs to draw cash if they want, and we operate in over 210 countries.

In Singapore, you can use cards everywhere -- you just swipe it. In Indonesia, it's a bit different, but it's still sufficient. We are upgrading our network all the time, working with more merchants so we can always provide the best services.

Are there any specific market segments that MasterCard is focusing on now, like the young professionals perhaps? What is Mastercard's strategy for this?

Southeast Asian economies have been growing extremely well, and there is a segment of the population that will become really "international".

This top 3 percent of the population, whether they are in Indonesia or Singapore or Malaysia, will talk the same language. They speak the same brands, they go to the same holiday places, they demand the same kind of products and solutions.

And so that's what we are doing. We are customizing and creating products and services for this particular segment.

The target for the World MasterCard is the super rich. Those who already have everything in life, and now want to enjoy the luxury and the very best in life. Those who want products for the connoiseurs: drink the best wine, use the best airlines, live the best holidays and vacations.

I think young professionals will be a particular market focus, because in all these countries there is a strong young population, and, to be honest, I think the days of "the young are not rich" are now gone. If you look at all the millionaires being created, like Google, they're so young.

So it's not about the age, but about the lifestyle. People with the money, whether they are 60 years old or 30 years old, we have the products for them.

How do you see the problem of credit card debt? Do you see this as a problem for the market?

I think bad debt is not a problem at all, like any other product, as long as you have responsible use of the product.

And for our part, MasterCard has always had consumer education campaigns all around, to inform them on the safe and proper use of credit.

Because credit can actually be a very useful tool: it can provide people with funds which might not have been available to them. In America, for example, there are a lot of students funding their college with credit.
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