Lavern Clarke, Business Editor
Patrick Hylton, group managing director of National Commercial Bank, congratulates Sheally Solomon, financial controller of Digicel Jamaica, who won a ticket to China, at the NCB Visa Business credit-card launch, at the Terra Nova Hotel, St. Andrew, Wednesday.-Contributed
National Commercial Bank (NCB) already has over 100,000 active credit-card subscriptions on the market, but demand for a new-type card that offers payment options in foreign currency has led to its introduction of another to the suite, the NCB Visa Business, which hit the market Wednesday.
The new card is targeted at companies, including small businesses, and is being sold as a less cumbersome source of cash-flow financing, eliminating hours spent at the bank purchasing foreign-exchange drafts to cover bills from overseas suppliers.
To qualify, the company must produce three years of audited accounts or six months of bank statements, supply a copy of its certificate of incorporation and other documents to prove it is legally approved to conduct business, and be a registered taxpayer.
For companies without audited statements, including sole pro-prietors, NCB said it would accept in-house draft accounts.
"We see NCB as the leading bank for businesses," said Courtney Campbell, general manager of retail banking. "We are the leading bank for SMEs in Jamaica."
NCB Visa is meant to leverage business for the bank from that market segment.
no sign up feeto march 2008
The card comes on the market at an introductory rate of 17 per cent interest for the first year, and no sign-up fee if acquired by March 2008.
Thereafter, the interest will be 18-19 per cent, says Campbell Payment is on a 55-day cycle, meaning that credit utilised will not attract interest until the 56th day of the transaction.
Credit limits will be determined on an individual basis, based on ability to pay.
Minimum payment on credit utilised is 10 per cent of the statement balance, and while companies are not required to be foreign-exchange earners to qualify for the card, they must repay in foreign currency, Campbell told Sunday Business.
NCB chose an 'airline flight' theme to launch the card, with flight attendants, First Officer Campbell and Captain Patrick Hylton, the bank's group managing director, conducting the midday flight under a tent on the grounds of the Terra Nova hotel in St. Andrew.
Hylton, in line with the 'global partnership' promotion for the card, said NCB was keen on adopting global standards and services for customers, in recognition of changing business environments. He made a commitment that the bank would continue to "innovate and be responsive" to clients.
The card's linkages with Visa gives it acceptance at 29 million locations worldwide, with travel accident insurance coverage of up to US$250,000. The insurance
component of car rental fees is also waived, but this is limited to transactions in the United States and Canada, said Campbell.
The credit card market, mea-sured by the increase in receivables or balances outstanding for a month, has been growing steadily,
as more Jamaicans opt for credit over cash for personal and business-related purchases. In May, receivables reached $11.5 billion, a near $2 billion increase year on year, according published central bank data.
Campbell says there are more than 200,000 active cards on the market, with NCB, Jamaica's No. 2 bank, estimating that its issues account for about 55 per cent of subscriptions.
The banker said, however, that an estimate of the actual turnover on the cards — credit consumed monthly — was not immediately available. He adds that while NCB dominates in the number of Point of Sale (POS) terminals installed, accounting for 79-80 per cent, No. 1 Scotiabank likely has the edge overall in the total market.
NCB, he says, believes it has more than a 40 per cent share of issued credit.
The POS terminals also represent revenues, offering NCB the opportunity to "earn from other cards." Merchants pay, on average, 2.5 per cent to NCB on transaction done through its terminals.
Businesses with high transaction volumes can negotiate lower merchant fees, he said.
Visa Business' introduction Wednesday followed the launch of Jamaican dollar denominated Keycard Business at the end of calendar 2006.
Its those clients, said Campbell, whose request for a foreign currency equivalent to pay overseas suppliers that prompted the bank's credit team to devise Visa Business.
NCB was coy in commenting on the expected business from the new card issue, but is banking on replicating the "early success" of its Keycard equivalent, whose average credit issue tops $1 million, with "no delinquencies" to date, said Campbell. The bank had projected average credit issue $1.5 million.
He adds that, overall, credit card delinquencies at NCB are "well within the accepted 8.0 per cent standard", but refused comment on the precise rate for competitive reasons.
Keycard Business, said the banker, brings in 10 per cent of monthly credit card revenues.
The commercial bank's business credit cards has already got ringing endorsement from Omar Azan, president of the Jamaica Manufacturers Association, who said his operation, Boss Furniture, was a subscriber The commercial bank's business credit cards have already got ringing endorsement from Omar Azan, president of the Jamaica Manufacturers Association, who said his furniture company, Boss, was a subscriber and had experienced better cash flow management as a result.
lavern.clarke@gleanerjm.com
