Travel itch among the affluent bumps card billings for UOB

SINGAPORE - UOB is gunning for 40 per cent growth in billings in its regional credit and debit cards base over four years, following an outperformance this year in this competitive market, a top executive said in an interview on Tuesday.

This strategy will be anchored by pushing out similar card deals for its consumers across the ASEAN region, as the bank taps not just its largest ASEAN network for the Singapore banking trio, but also trends that show active intra-ASEAN travelling despite the dour economic sentiment.

The bank has taken up about 20 per cent of market share in terms of billings for the year in Singapore, Jacquelyn Tan, regional head of cards and payments at UOB, told The Business Times.

It has racked up close to 10 per cent growth in billings from a year ago, which is stronger than the industry average of about 5 per cent, according to UOB.

Singapore's performance brings the bank's regional card billings up by also 10 per cent, with its other three markets Malaysia, Indonesia, and Thailand, likewise growing at a stronger pace than the industry.

Ms Tan names her strategy the "House of Cards", a nod to the Netflix political drama, of which she is a fan.

Read also: UOB launches KidSmart programme

In the two years into her new role, she has focused on affluent travellers and millennials, to "dominate usage" in spending categories such as dining, groceries, and cross-border transactions.

This comes as UOB's own survey of 2,030 affluent ASEAN respondents found more than 60 per cent of respondents picked Asian destinations for their vacations.

Many of these include South-east Asian countries, UOB said.

The bank also launched a "passport" programme early this year that offers the same suite of promotions to all UOB cardholders in the four ASEAN markets where it issues cards.

This means a Singapore traveller holding a UOB credit card will be entitled to the same deal at Bangkok's Siam Paragon as someone with a UOB card issued in Thailand.

"It's important to establish the regional corridor," said Ms Tan, adding that e-commerce spending alone - which includes travelling expenses - makes up 20-30 per cent of all card billings across the four markets.

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"As South-east Asia's affluent continue to strike a balance between their wanderlust and their economic sensibilities, we anticipate that intra-regional travels will continue to grow (within) this segment."

On top of issuing cards, UOB is also working to boost its regional network in accepting payments for merchants.

Banks earn money as a card issuer, and as one backing the merchant - or as the acquirer.

Ms Tan said UOB is currently the largest acquiring bank in Singapore.

She acknowledges that having a stronger acquiring network is one way to counter a potential threat of thinner forex spreads earned on online spending, as fintech disruptors have been selling products to allow consumers to pay in their home currency.

Depending on the fintechs' strategy, online retailers could sell products to consumers at a better forex conversion rate.

UOB has been the first here to launch a single point-of-sale terminal that would take both credit-card and NETS transactions.

These can be found at all 7-11 stores. UOB expects to roll out more of such terminals at stores run by Dairy Farm, which operates the Cold Storage chain.

Read also: MAS probes case of UOB's unshredded client data

leejamie@sph.com.sg

This article was first published on Nov 23, 2016.
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