Retail in Asia

In Trends

Digital payments are shaking up Asia’s credit card industry

Mobile Payments Retail in Asia

Free rice cookers and suitcases were among the special deals that tempted Chiu Wing-suet into accumulating her 20 credit cards, many of which are crammed into her wallet. She’s unlikely to accept any more such offers.

The shifting attitude of Asian consumers such as Chiu is upending the economics of the credit-card industry, and banks like Citigroup Inc., HSBC Holdings Plc and Standard Chartered Plc are taking note.

SEE ALSO: Can Hong Kong’s Octopus compete with Apple Pay?

The banks, which increasingly rely on the region’s swelling number of affluent people to drive profits, are slashing the number of card products they offer in Asia and focusing instead on getting a smaller range of cards adopted for online payments.

Citigroup has slashed its number of card offerings in Asia from 270 to just over 100, in line with the 60 percent reduction in global card products, Zanatti said. That contributed to the 12 percent drop in operating expenses at Citigroup’s consumer-banking operations in Asia last year.

HSBC, which has posted billboards all over central Hong Kong to promote its tie-up with Apple Pay, says its number of active mobile-banking clients in the city has jumped almost 50 percent over the past three years — and predicts offerings such as Apple Pay will keep that figure rising.

Millions of Asians are starting to use credit cards as they join the middle class — and in many cases, almost simultaneously adopting the mobile payment services offered by the likes of Tencent Holdings Ltd. and Alibaba Group Holding Ltd.’s finance affiliate.

(Source: Bloomberg)