Idle credit cards prompt Citi, HSBC overhaul
Free rice cookers and suitcases were among the special deals that tempted Chiu Wingsuet into accumulating her 20 credit cards, many of which are crammed into her wallet. She’s unlikely to accept any more such offers.
“I’ve come to realize that most of my cards are useless,” said the 30-year-old Hong Kong nurse. “I basically use only one card, for shopping and travel booking online.”
The shifting attitude of Asian consumers such as Chiu is upending the economics of the credit-card industry, and banks like Citigroup Inc, HSBC Holdings Plc and Standard Chartered Plc are taking note. The banks, which increasingly rely on the region’s swelling number of affluent people to drive profits, are slashing the number of card products they offer in Asia and focusing instead on getting a smaller range of cards adopted for online payments.
In Asia more than elsewhere, consumers are increasing card spending while jettisoning some of their plastic. At 18 percent last year, regional growth in credit-card payments was double the global rate, data from Londonbased Retail Banking Research show. Yet the actual number of cards in circulation fell in Asia last year even as the worldwide tally increased, RBR estimates.
And that was before Apple Inc began rolling out its mobile-device payment system Apple Pay in Asia.
“The real game now is to get your card to be the one that sits behind the payment platform,” said Keith Pogson, a senior partner at Ernst & Young LLP. “The customer doesn’t change it. They make a decision once about which card numbers they are going to use in the system. That decision for the banks is critical