Amex sheds upmarket obession

Known traditionally for snob value in catering only to wealthy customers, American Express, the world’s largest credit card issuer by purchase volume, is now looking at the middle-income segment to expand its base in India.
The company, which had a customer-card eligibility criterion of Rs. 10 lakh or more as annual income, has reduced this to Rs. 4 lakh. “Till now we were not servicing the value-conscious customers in India,” said Shailesh Baidwan, country manager and head, consumer services, American Express Banking. “Our new product is tailored to satisfy the needs of the rapidly growing value-conscious segment,” he said.
American Express ranks third in India in terms of credit card spending, behind Citi and HDFC, and has a 13% market share in the country.

http://www.hindustantimes.com/business-news/BusinessBankingInsurance/Amex-sheds-upmarket-obession/Article1-1082983.aspx

No easy EMI Facitlity on HDFC Bank credit card for Jewellery

India's efforts to curb demand for gold and its import volume to reduce a record current account deficit (CAD) seem to have the support of financial services companies.

After Reliance Capital's decision to halt sales of gold-backed funds, it's now HDFC Bank's turn to stop the use of credit card for gold purchases. The second largest private lender has directed its branches not to accept credit cards for gold coin purchases. On Wednesday, it issued a note to jewellery outlets to stop providing easyEMI facilities to customers to prevent speculative investment. "We would like to inform you that as per the bank's internal policy guidelines related to loans for jewellery purchase, we will be discontinuing the easyEMI facility on HDFC Bank credit cards for the purchase of jewellery with immediate effect," the note said.

State Bank of India, India's largest lender, has discontinued selling gold coins on wholesale basis after finance minister P Chidambaram urged banks to stop selling golds as a step to ease the pressure on imports and CAD. "We are going slow on gold coin sales," said Union Bank of IndiaBSE 2.89 % chairman and managing director Debabrata Sarkar. Gold imports have slowed to about $36 million a day from $135 million before the curbs, Chidambaram said last week.

The latest direction by HDFC Bank will prohibit its credit cardholders purchase jewellery on easyEMI at the designated jewellery outlets. They will, however, be able to use their HDFC Bank credit card for normal purchases. The bank did not respond to an ET query what would have triggered the move but a bank official said on the condition of anonymity: "We don't encourage speculative investment." HDFC Bank is planning to de-activate the easyEMI terminal IDs of retail jewellery outlets immediately.

VS Mani, head of administration at Chennai-based 600-crore Prince Jewellery, said: "We introduced this scheme at some three years ago. But suddenly on June 26 HDFC Bank decided to discontinue it. This will obviously affect our business. The scheme was a major draw among our young customers who are HDFC credit cardholders. However, the payment issue will be decided between the bank and the customer and we do not have any role to play."  Some jewellers said banks were trying to please Reserve Bank of India, which has just taken a slew of measures to put restrictions on the import of gold. Rajiv Popley, director, Popley & Sons, said: "Purchasing gold by using credit card was gradually becoming popular. But unfortunately, the withdrawal of the scheme will affect this new line of business. Nearly 10% of our business used to come through this route."

http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/hdfc-bank-not-to-accept-credit-cards-for-gold-sale/articleshow/20808326.cms

Bangalore's redBus sold to South Africa' Ibibo in one of India's biggest overseas internet deals

Pioneering bus ticketing service provider redBus has been sold for an undisclosed sum to the Ibibo group, a subsidiary of South Africa's Naspers, in one of the biggest internet deals in India in recent times.

Phanindra Sama and Charan Padmaraju, the engineers from Andhra Pradesh who created redBus seven years ago, have sold their stakes to Ibibo

Sama and Padmaraju together held 18.2-per cent stake in redBus before the sale. Other investors in the company, including SeedFund, Kanwal Rekhi's Inventus and Helion Ventures, have also exited redBus.

RedBus is said to have an enterprise value of over Rs600 crore, which makes it the biggest deal involving an internet firm in India since the world's largest marketplace Ebay bought Baazee.com in a $55 million deal in 2004.

Ibibo will add redBus to its existing travel assets that include online travel aggregator Goibibo.com and TravelBoutiqueOnline, an online platform that enables thousands of small and medium travel agents.
RedBus, however, will be a stand-alone entity and Sama and Padmaraju, both 32, will continue in their roles as CEO and new product developer. "Charan is the Sergey Brin (the Google co-founder who is currently involveded in the Google Glass project) of redBus," says Sama.

Alok Goel, the Google executive who moved to redBus as chief product officer last year, and Bharat Singh, the GE executive who came in as CFO last year, will also continue.

redBus aggregates 228,000 seats per day, sells more than a million tickets a month and has over 600 employees.

The gross value of transactions on redBus last year was about Rs600 crore, up from Rs350 crore in 2011-12 while the net revenue, or commission, of the company was much lower at Rs33 crore. The company is said to have made a net profit in 2011-12.

Ashish Kashyap, CEO of Ibibo Group, said the acquisition would make the group one of the largest in the online travel space.

Naspers has invested a little over $90 million into Flipkart to become its second largest shareholder after Tiger Global.

China's Tencent also holds a 20 per cent stake in Ibibo Group.

Mumbai-based investment bank Avendus Capital was the sole advisor to the deal.

Korea has highest credit card transaction rate in world: BOK

It seems there might be a reason why Koreans don't carry a lot of cash in their wallets. The number of credit card transactions in Korea was the highest in the world in 2011, according to data released by the Bank of Korea on Monday.
It shows Korea's per-capita credit card transactions stood at 130, up more than 10 percent from a year earlier. Canada and the United States followed, with 90 and 78, respectively.
The central bank says the government promoted the use of credit cards as a means to boost domestic demand and tax revenue after the Asian financial crisis in 1997. 

Axis Bank launches premium credit card for frequent overseas travellers

Private sector lender Axis Bank said it has launched a premium credit card which will provide financial and travel benefits to frequent overseas travellers. The card has been issued in association with Europe's largest frequent flyer programme Miles and More, and will be available in two variants—World and World Select.

"We have launched this credit card, which will give financial and travel benefits for international frequent flyers. We aim to target affluent customers for this new product," said President and Head of Consumer Lending and Payments of Axis Bank, Jairam Sridharan. The banks aims to provide cardholder get access to frequent flyer programme of Lufthansa and other member airlines with this premium credit card. The cardholder will also enjoy insurance benefit and discount of 20 basis points on home loan products.

Axis Bank’s total credit card book size stands at around Rs 1,200 crore, which is close to 2 per cent of its total retail asset.

"Axis Bank had shown one of the highest growth in credit card segment in the industry last fiscal. Spends had grown by more than 100 per cent for us in the last fiscal. We are positive in this space," he said.