Standard Chartered Bank (StanChart) isn’t in a mood to stop at `Manhattan’, its recently-launched global credit card. After launching the card, which has a minimum interest rate as low as 1.99 per cent per month, the bank has made its next step clear: it is on the prowl for acquiring the card businesses of other issuers.
“If the composition of a credit card portfolio is consistent with our credit criteria and available at the right price, we are in the market to acquire it to increase our market share,” StanChart’s global product head (credit cards & personal loans) John Filmeridis told FE.
“We will also have to see the spending and payment patterns of customers in the portfolio,” Mr Filmeridis said.
With interest rates on credit cards beginining to move downwards amid growing competition and availability of customer information from credit information bureaus, the credit cards business in India is expected to witness a phase of consolidation, he said.
“The credit card business is a very tough one and increasing pressure on fees and interest rates due to rising competition will see many players opting out of the market,” he said.
With the credit information bureau concept in place in India, why should a good customer subsidise a bad customer, he asked.
This is the main reason for high interest rates on credit cards — delinquency costs are added to interest rates. Credit card service providers should also have an efficient credit appraisal system, he said.
StanChart will have various categories of customers with different interest rates for different categories. The bank has got five to six such categories for customers in Singapore, he said. “In India too, we will have such categories based on the customers’ credit appraisals and spending and payment patterns,” Mr Filmeridis said.
The bank on Tuesday launched a global credit card, Manhattan. It provides customised pricing with interest rates varying from 1.99 per cent to 2.49 per cent per month. The rate depends on credit performance and payment pattern of customers and usage of the card. The bank, which has issued about 16 lakh credit cards, has a market share of 20 per cent.