Visa Int'l upbeat on debit card business

By FIL C. SIONIL

Visa International, the global electronic payment network, is upbeat about business opportunities for debit card in the Philippines, projecting an increase in issuances through member-banks with automated teller machine (ATM) base.

In an interview with reporters before the weekend, Visa International Philippine country Manager Jim Dixon described a promising outlook on virtual cash industry because of its convenience.

Virtual cash industry refers to cashless activities and/or transactions using pre-paid card, debit card and credit card.

"Our outlook remains very positive," Dixon said, adding that the growth rate this year could be "the same" as in the year past," at the very least, or "even faster and exceeds that of 2005" on the maximum.

Dixon anchored Visa’s encouraging forecast to the growing acceptance by the populace of cards as an alternative, convenient and safe tender for doing business.

He believed this particular segment of the industry that has yet to be tapped, which can be reversed through intensified information campaign on the reliability and effortlessness use of cards, specifically debit cards.

Visa has already embarked on this project in partnership with the Junior Financial Executives Institute (JFINEX), promoting financial education through the 7th Inter Collegiate Finance Competition in Metro Manila, the Visayas, and Mindanao.

"Our big focus this year will be on debit card with more Visa member-banks with an ATM base issuing debit cards," Dixon said.

To date, there are nine financial institutions issuing Visa cards and/or have signed-up with merchants to accept Visa cards for payments. These include, among others HSBCPhilippines, Union Bank of the Philippines, EquitablePCI Bank (EPCI Bank) and Standard Chartered BankPhilippines.

Philippine National bank and the Land Bank of the Philippines issue visa credit cards through EPCI Bank sponsorship.

"Visa Debit has seen significant growth in the Philippines over the past couple of years. In 2005, total sales volume from Visa Debit products amounted to over P104 billion, a 67 percent increase from 2004. The total number of debit transactions reached 35 million," Dixon disclosed.

Retail sales volume, on the other hand, reached P76.5 billion or roughly equivalent to .4 billion, for a 27 percent yearonyear growth.

Debit cards are used much like credit cards, but rather than accessing a credit line, cardholders access their own funds on deposit with their bank. All purchases using Visa Debit cards are automatically debited to the cardholder’s bank account. The cardholder’s spending capacity is likewise limited by the amount of funds he has in the account.

Because of these features, Visa Debit cards have become a very popular replacement to the traditional ATM cards that are issued by banks to account holders.

"This is a reflection of the increasing awareness among Filipinos towards the benefits and convenience of using electronic payment cards. The advertising campaign aims to educate cardholders on the benefits that they can derive from their Visa Debit cards," said Dixon.

Here in the Philippines, there are so far some 69,300 outlets accepting Visa cards, nationwide with an estimated 7.6 million in total Visa cards circulating, which include pre-paid, debit and credit cards.

Visa cardholders accounted for about two percent of total consumer spending as of end December 2005.

While, globally, Visa Debit, Credit and Prepaid cards are accepted in over 24 million merchant locations and 900,000 ATMs, with over 1.3 billion cardholders from over 20,000 member financial institutions.(FCS)

 

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