E-commerce Fuels Growth In SBI Credit Card Transactions, Says Jasuja

Last year, SBI Card, credit card arm of State Bank of India, appointed Vijay Jasuja as Chief Executive Officer of the company. Jasuja is eyeing to make the credit card company as the second largest circulator by the end of 2015. Having registered a substantial growth in FY'14-15 in terms of new customer acquisitions, SBI Card has strengthened its position in the credit card market and is presently the third largest issuer in India.

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24 August, 2015

by BW Online Bureau

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Speaking to BW | Businessworld's Arshad Khan, Jasuja talks about the company's strategic plan to emerge as the second largest player, relation with GE Capital, trends in defaults and more. Excerpts from the interview

At present, SBI Card is behind HDFC and ICICI in terms of credit card circulation. What are the strategic plans to make SBI Card the second biggest player in the credit card market?

We have immediate goals to become the second largest player in the market and eventually become the market leader.

We follow a three-pronged strategy to acquire newer customers. First, we follow open market sourcing to obtain consumers. SBI Card has presence in 68 locations in the country including associates that actively seek newer customers. Secondly, State Bank of India (SBI) being our parent company, we have access to a huge customer base of SBI that can be converted into SBI Card customers. Thirdly, we launch various co-branded cards with multiple partners that help us expand our reach to newer customers.

Some of our co-branded cards are the Bank of Maharashtra SBI Platinum Credit Card, FBB-SBI STYLEUP Card, Air India SBI Signature Card, Mumbai Metro Credit Card ,Federal Bank SBI Platinum Credit Card among others.

Lastly, we have enhanced the value proposition on our flagship card SimplySAVE. We have designed this card with features to complement the spending habits of today's younger generation. Inspired by the spending habits of young Indians, this card offers accelerated rewards while dining, watching movies or shopping at supermarkets.

Our tie-ups with online portals that are aimed at offering the most rewarding online shopping experience to customers have also found traction with customers.

What is SBI's current status with GE Capital? Have you found a new strategic partner or will continue independent?

We have had a long-standing and a mutually beneficial association with GE Capital. The future course of action is being discussed among the key stakeholders with consumer-centricity at the heart of all discussions and decisions. We will announce our decision at the appropriate time.

What role does technology play to cater to the needs of such a large consumer base?

Technology plays a vital role in delivering a seamless experience to the customers. Technology has helped us address the changing needs and requirements of our evolving customers over time.

We have a robust back-end infrastructure and deploy one of the most advanced CRM (Customer Relationship Management) platforms to ensure that the customer service process is carried out seamlessly.

Observing the consistent increase in traffic from the mobile app, we have recently launched version 2.0 of the SBI Card Mobile App. This app is available across all mobile phone operating systems such as iOS, Android and Windows Phone and has seen close to 4 lakh downloads since the time of its launch.

What are the safety measures followed by SBI to counter physical as well as online credit card fraud? Throw light on any out of the box fraud and how technology helped to track the fraud?

SBI Card offer the most updated safety features to prevent credit card fraud. We hold the distinction of being one of the first players to offer the advanced chip and PIN cards in India, and we have upgraded all our cards to the EVM based chip platform for greater security. Realizing the potential for online fraud, given the rising popularity of online shopping in India, we have added a second layer of safety for such transactions. For completing any online transaction using an SBI Credit Card, we have made the use of a One Time Password (OTP) mandatory.

What number of rise in circulation do you sight by the end of FY16?

We have been making focused investments towards product, processes and customer service and have been witnessing a steady rise in new card subscriptions from customers across segments and age groups. At present, we have over 3.2 million cards in force and expect the increase in subscriptions to continue in the future.

How has the growth of E-commerce impacted the credit cards business in India?

The e-commerce sector in India is growing at a fast pace as more and more Indians are completing online transactions using their credit cards. We have seen e-commerce spends on our cards grow more than 200 per cent compared to the previous year. This growth has been driven by an increase in the number of cardholders transacting online. Currently, spends from e-commerce transactions account for40-45 per cent of the total spends on our cards.

What has been the trend in defaults over credit card payments in recent years?

Most customers today are aware of the negative impact of defaulting on credit card payments on their CIBIL ratings and are therefore careful about meeting the payment due dates to maintain/ improve their credit worthiness. Hence, instances of defaulting have gone down over time.

However, there are still some cases of defaulting but post the recent guideline issued by RBI allowing customers three more days to make their credit card payments without getting fined, we expect the defaulter rate to reduce even further.