Visa turns to debit cards to boost its market share

According to the firm's figures, by the end of June the number of debit cards issued had surpassed 2.1 million, up 92 percent from a year ago. During the first six months of the year, the value of retail sales recorded on debit cards stood at NT$2.7 billion (US$82.5 million), rising 77 percent from last year.

In contrast, the growth rate for classic and gold credit cards has been declining as the nation's more than 50 banking institutions have been engaged in a cutthroat competition to secure a share of the small market.

As of the end of July, 45.47 million credit cards were circulating among the nation's population of 23 million, according to data released by the Bureau of Monetary Affairs under the Financial Supervisory Commission.

Visa is therefore investing 30 percent of its marketing budget in promoting debit cards, with the aim of educating the public, raising awareness of the payment tool and encouraging card use through various campaigns, said Christopher Clark, Visa's general manager in charge of the greater China region, including Taiwan, Hong Kong, Macau and the Philippines.

In addition to debit cards, platinum credit cards are seen as another potential segment to drive up sales volumes, said Marco Ma (麻少華), Visa's country manager in Taiwan.

Platinum cards account for 26.11 percent of Visa's total cards issued, but it contributed 46.62 percent of retail sales volume by the end of June.

"Platinum cards apparently have become a mainstream product in Taiwan's payment market. Visa will focus on the vast platinum cardholder segment to present tailor-made privileges for family, recreation and luxury seekers," Ma said.

However, the benefit programs offered to platinum card users have been shrinking as banks have cut annual fees for these cards, with the sole aim of boosting their market share.

This has resulted in the cancellation of services such as free travel insurance and free parking at airports, as card issuers have found these offers to be too costly.

Noting that the situation is unique to Taiwan, Clark said Visa will present its own preferential programs on top of banks' platinum card privileges.

Visa had issued 26.5 million cards in Taiwan as of the end of June, up 15 percent from last year.