Credit card war hots up ahead of festive season; cos announce a slew of tie-ups, BFSI News, ET BFSI
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New card additions were the highest for ICICI at 655,000 during this fiscal while added 198,000 cards being the highest in the past 16 months.
HDFC Bank, on which RBI recently lifted a ban of issuing new credit cards, has announced a tie-up with leading payments company Paytm to start selling co-branded plastics before the onset of the festive season. The credit cards will be powered by Visa and will include offerings targeted at millennials, business owners and merchants, an official statement said.
Paytm has a reach of over 330 million consumers and 21 million merchants, while HDFC Bank has over 5 million debit, credit and prepaid cards, and serves 2 million merchants through its offerings.
HDFC Bank, the largest private-sector bank which also leads the credit card segment, was banned from issuing new credit cards for over eight months as a penalty for frequent outages. After the lifting of the ban, it outlined aggressive plans to regain lost market share in up to a year.
The bank had said that it will focus on distribution partnerships to achieve its target, under which it envisages ramping up new credit card sales to 5 lakh a month by end of the fiscal from 3 lakh in November 2021.
HDFC Bank and Paytm had last month announced a tie-up on the payments side. Paytm already has a tie-up with foreign lender Citi under which co-branded credit cards are issued. Citi is looking to exit retail banking activities in the country.
The launch of the HDFC Bank-Paytm co-branded cards is slated for next month, ahead of the festive season which typically sees a spurt in spends, the statement said, adding a full suite of products will be available by December.
Yes Bank ties up with Visa
Yes Bank has tied up with Visa to issue credit cards to its customers on the payment platform, which includes a suite of nine credit card variants. The Yes Bank card issuances were hit after RBI had banned Mastercard from issuing cards.
“The transition has been achieved within a record time of less than 60 days, ensuring ease for customers across segments,” the bank said.
Yes Bank and RBL Bank were hit the most by the Mastercard ban as their entire card network was on it. RBL Bank had announced a tie-up with Visa the day after the curbs on Mastercard were announced and resumed issuing cards from September 15. Yes Bank’s Visa credit cards, announced today, will service all segments–consumer cards, business cards, and corporate cards across YES First, YES Premia and YES Prosperity.
AU Small Finance Bank
AU Small Finance Bank (SFB) has issued over 40,000 credit cards since its launch a few months back, and more than half of them are first time users. The Jaipur based lender said it is the first SFB to enter semi-urban and rural areas with its own credit cards. It also offers a special Altura plus credit card to empower women to experience a limitless living.
In future, the bank is also working on bringing out its limited-edition cards, featuring the bank’s brand ambassadors Aamir Khan and Kiara Advani.
“The forthcoming festive season will lend further support to the picked-up momentum in the spends and new customers sourcing. However, a possible Covid 3.0 remains a key risk. We continue to believe that Citi Bank’s exit from the credit cards business along with the domestic corporate loan recovery cycle yet to pick up, provides good growth opportunities for the credit cards business, supported by improving macro-conditions,’ Axis Securities said in a note.
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