Hong Leong Bank Bhd is looking to establish a cardholder base of 2 million for its so-called combi debit card over the next five years, an official for the Kuala Lumpur-based bank tells PaymentsSource.
The combi card carries both the Visa and Malaysian Electronic Payment System (MEPS) brands. The Malaysian Electronic Payment System Sdn Bhd is a payment consortium owned equally by 12 local banks that issue a combined 25 million debit cards.
An earlier debit card the bank issues has just the system’s brand and can be used only domestically. Customers can use the new card anywhere Visa is accepted globally.
“The first Hong Leong debit card that carries the MEPS logo has been subscribed for by 1 million cardholders,” the spokesperson says. “For the first year, we are looking at a figure of 300,000 debit cardholders for this new combi card.”
According to the official, the bank expects to reach that target because Malaysians increasingly are using debit cards. “Our data shows that debit card use has grown over 75% over the last five years,” he says. “Given the recent announcement of a tax on credit cards, we expect more traction toward debit card use.”
Effective Jan. 1, the Malaysian government introduced an annual tax of 50 ringgits (US$15 or 11 euros) on every primary credit card and 25 ringgits on every supplemental credit card (see story). The government’s goal is to reduce consumers’ card debt.
AmBank (Malaysia) Bhd has launched a credit-limit facility to help its cardholders save on their credit card tax, an official for the Kuala Lumpur-based bank tells PaymentsSource. “We have introduced two credit limits for our cardholders, who can use one credit limit for daily spending,” he says. “The other credit limit of up to 50,000 ringgits can solely be used by the holder to consolidate all outstanding balances from other credit cards.”
According to the official, this dual credit-limit facility will enable cardholders to manage their finances with only one card and thus limit having to pay the tax on only one card.
In addition, the bank also said in a statement that its cardholders could offset their credit card tax through cash redemptions once they have 5,000 reward points.
Last month, the Association of Banks in Malaysia announced that local card issuers were free to use instruments such as reward points to offset the credit card tax for their card holders (see story).