In India corporate card market is expanding rapidly by 25% a year. American Express Corporate card, has a base of almost 5,500 Companies in India, and is growing at around 50% for the last couple of years.
American Express, one of the world’s leading corporate card issuers, has planned to make its mark both in big corporate and small & medium enterprise (SME) segments. .
Currently, big corporates or the large market (LM) account is driving bulk of Amex’s revenues in India.
“LM has been growing by almost 40% and seems to be the biggest revenue driver for next few years,” said Prashant Agarwal, head of consulting at American Express for Japan and the Asia Pacific region.
Agarwal said, “We expect the industry to grow by at least 25% over the next few years”.
American Express conducted a survey according to which, about 83% of the LM segment has some form of corporate cards.
Thursday, May 29, 2008
Thursday, May 22, 2008
Buy fund units using credit cards
Share market is quite, fund houses are busy in making new arrangements, that is searching for alternate payment gateways that will help individuals in making mutual fund investments, which could not have been possible if there has been movement in the share market.
Some of the bigger players among the fund houses are working out the plan to roll out the services whereby credit cards and mobile payments can be used in favor of mutual fund investments.
M N Srinivasu director of BillDesk that facilitates the payments channel for mutual funds among many other industries points out, “At least two players are almost ready to offer payments via credit cards.”
The cost of transaction is the main hurdle for mutual funds for not been able to accept credit card payments.
If transaction is allowed through credit card then mutual funds would have required paying 2% to the credit card company for each transaction, as against around 2.25% to the broker.
It is being considered that fund houses have been asking for reduced costs as the credit card industry will be benefited in terms of number and value of transactions.
It seems the cost may be the factor for life insurance companies for not promoting the credit card payment channel. Currently only few of life insurance companies are using this channel.
Other than credit cards, payments using mobile phones are also being taken into consideration for an entry into the fast-growing mutual fund industry. Talks are being held between mobile payments provider mChek and several fund houses, and according to Sanjay Swamy, chief executive officer of mChek atleast some of them are set to announce the launch of this facility within few weeks.
Meanwhile insurance companies such as ICICI Prudential Life Insurance and Reliance Life Insurance have already allowed mobile payments for their customers, while soon a foreign insurance giant is expected to roll out the facility.
It is just one-time payments in general insurance, made via credit cards and has gone down considerably.
In case of mutual fund and insurance sectors, the credit card or mobile payments may or may not necessarily be first-time payments. But still it is to be seen how fund houses manage with the stringent KYC requirements that mutual fund regulators ask for.
Some of the bigger players among the fund houses are working out the plan to roll out the services whereby credit cards and mobile payments can be used in favor of mutual fund investments.
M N Srinivasu director of BillDesk that facilitates the payments channel for mutual funds among many other industries points out, “At least two players are almost ready to offer payments via credit cards.”
The cost of transaction is the main hurdle for mutual funds for not been able to accept credit card payments.
If transaction is allowed through credit card then mutual funds would have required paying 2% to the credit card company for each transaction, as against around 2.25% to the broker.
It is being considered that fund houses have been asking for reduced costs as the credit card industry will be benefited in terms of number and value of transactions.
It seems the cost may be the factor for life insurance companies for not promoting the credit card payment channel. Currently only few of life insurance companies are using this channel.
Other than credit cards, payments using mobile phones are also being taken into consideration for an entry into the fast-growing mutual fund industry. Talks are being held between mobile payments provider mChek and several fund houses, and according to Sanjay Swamy, chief executive officer of mChek atleast some of them are set to announce the launch of this facility within few weeks.
Meanwhile insurance companies such as ICICI Prudential Life Insurance and Reliance Life Insurance have already allowed mobile payments for their customers, while soon a foreign insurance giant is expected to roll out the facility.
It is just one-time payments in general insurance, made via credit cards and has gone down considerably.
In case of mutual fund and insurance sectors, the credit card or mobile payments may or may not necessarily be first-time payments. But still it is to be seen how fund houses manage with the stringent KYC requirements that mutual fund regulators ask for.
Wednesday, May 14, 2008
You have the right to get credit report
You decide to take a loan and apply for it with your bank. Then you get a call from your bank that your loan application has been rejected. This can happen in case of credit card also. On asking bank gives the reason that you have a ‘bad credit history’.
In case you have, you have a right to ask the bank for the data based on which it took that decision.
According to law, if a bank refuses loan or credit card application on the basis of data provided by a credit bureau, it is supposed to give you a copy of those records.
On the other hand, before you are given the report, you might have to prove that you are the person whose credit report is required. Therefore you must carry an identity proof and address proof with you.
Remember, except you nobody else, not even your kith or kin, would be handed over your report. To obtain the credit report you have to apply for loan or a credit card otherwise you will not get it.
The process of credit report
At present the Credit Information Bureau (India) Pvt Ltd (Cibil) maintains records of your borrowing history with all the banks you have transacted with. These include details such as your permanent account number, the addresses you have notified banks about, number of credit cards you hold currently or have held in the past, loans you have taken, the period within which you have repaid or whether you have not repaid and for what period you have not repaid.
The Cibil provides report to all its 147 members, who in turn keep the database updated. As and when a person applies for a loan or credit card, the member banks would check with the Cibil database.
The system also keeps check of the details such as the last time any bank checked for your credit records. This indicates the last time you applied for a loan with any bank, as banks are not supposed to check the Cibil database unless they receive a loan or credit card application.
Banks are not allowed to check the records for marketing purposes. According to banking source each time they check the database, they are charged for it.
In case of individual whether they are being charged for the report, DNA Money carried out a random survey and found that some banks charge between Rs 50 and Rs 300 for furnishing credit reports.
Cibil is currently working on a system whereby you can get your credit report against a payment of Rs 100.
If case you find any inconsistency in the data maintained by Cibil on you, then you should inform the bank and take up your case with Cibil. However, note that you would require the credit report as a proof to even take up the case. So keep your copy safe.
In case you have, you have a right to ask the bank for the data based on which it took that decision.
According to law, if a bank refuses loan or credit card application on the basis of data provided by a credit bureau, it is supposed to give you a copy of those records.
On the other hand, before you are given the report, you might have to prove that you are the person whose credit report is required. Therefore you must carry an identity proof and address proof with you.
Remember, except you nobody else, not even your kith or kin, would be handed over your report. To obtain the credit report you have to apply for loan or a credit card otherwise you will not get it.
The process of credit report
At present the Credit Information Bureau (India) Pvt Ltd (Cibil) maintains records of your borrowing history with all the banks you have transacted with. These include details such as your permanent account number, the addresses you have notified banks about, number of credit cards you hold currently or have held in the past, loans you have taken, the period within which you have repaid or whether you have not repaid and for what period you have not repaid.
The Cibil provides report to all its 147 members, who in turn keep the database updated. As and when a person applies for a loan or credit card, the member banks would check with the Cibil database.
The system also keeps check of the details such as the last time any bank checked for your credit records. This indicates the last time you applied for a loan with any bank, as banks are not supposed to check the Cibil database unless they receive a loan or credit card application.
Banks are not allowed to check the records for marketing purposes. According to banking source each time they check the database, they are charged for it.
In case of individual whether they are being charged for the report, DNA Money carried out a random survey and found that some banks charge between Rs 50 and Rs 300 for furnishing credit reports.
Cibil is currently working on a system whereby you can get your credit report against a payment of Rs 100.
If case you find any inconsistency in the data maintained by Cibil on you, then you should inform the bank and take up your case with Cibil. However, note that you would require the credit report as a proof to even take up the case. So keep your copy safe.
Friday, May 9, 2008
Increase in number of Indians deferring credit card payments
In the recent time the number of defaulters of credit card payments has increased. More and more Indians prefer to default of their credit card payments. As per the latest records of Reserve Bank of India over one year, credit card out standings have gone up by more than 50% to Rs 19,344 crore as on February 15, 2008. Moreover the growth of credit card outstanding is taking place at a time when there has been a control on overall credit growth. The growth in personal segment has been of mere 9% from February 16, 2007, to February 15, 2008.
In an interview with Sunday ET Reliance Money CEO Sudip Bandyopadhyay told that banks are already facing slow growth in personal loan segment in the backdrop of the imposition of stringent rules and slowing down of economy. He said, “This is why banks such as ICICI Bank are actively encouraging consumers to buy products through credit card route which is more cost-effective in comparison to the personal loan segment.”
In financial year ’06 the outstanding of credit card was 41%, which moved up to 47%, in financial year ’07. According to report the credit card outstanding as on March 2005 was just Rs 6,432 crore, it was one-third of total credit card outstanding today. In spite of low percentage of users of plastic money by Indians as compared to many other nationals there has been steep rise in the credit card outstanding in the country.
As per the research done by the Visa in Asia, Indians make just 1% of their total purchases through credit cards against 20% for the Koreans while global average hovers around 9%.
However Standard and poor’s Asia-Pacific chief economist Subir Gokarn, has a view that there is no correlation between personal loan and credit card outstanding. “There is such a small percentage of population that owns a credit card unlike the West where outstanding figures are reflective of systematic risk in the economy. The increase in outstanding is more of a reflection in the growth of credit card companies’ catchment’s area. After all, India is adding a young population to its labor force, which doesn’t believe in saving. For today’s youth, spending comes naturally,” he said.
According to internal estimates of Barclay card the Indian credit card market size at 23 million cards, and it has the potential to grow to at least 55 million cards by 2010-11.
In an interview with Sunday ET Reliance Money CEO Sudip Bandyopadhyay told that banks are already facing slow growth in personal loan segment in the backdrop of the imposition of stringent rules and slowing down of economy. He said, “This is why banks such as ICICI Bank are actively encouraging consumers to buy products through credit card route which is more cost-effective in comparison to the personal loan segment.”
In financial year ’06 the outstanding of credit card was 41%, which moved up to 47%, in financial year ’07. According to report the credit card outstanding as on March 2005 was just Rs 6,432 crore, it was one-third of total credit card outstanding today. In spite of low percentage of users of plastic money by Indians as compared to many other nationals there has been steep rise in the credit card outstanding in the country.
As per the research done by the Visa in Asia, Indians make just 1% of their total purchases through credit cards against 20% for the Koreans while global average hovers around 9%.
However Standard and poor’s Asia-Pacific chief economist Subir Gokarn, has a view that there is no correlation between personal loan and credit card outstanding. “There is such a small percentage of population that owns a credit card unlike the West where outstanding figures are reflective of systematic risk in the economy. The increase in outstanding is more of a reflection in the growth of credit card companies’ catchment’s area. After all, India is adding a young population to its labor force, which doesn’t believe in saving. For today’s youth, spending comes naturally,” he said.
According to internal estimates of Barclay card the Indian credit card market size at 23 million cards, and it has the potential to grow to at least 55 million cards by 2010-11.
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