MasterCard to tap unbanked rural sector

Gold Coast (Australia), June 6: PLASTIC money leaders in Asia and Pacific, MasterCard on Wednesday said it plans to tap the unbanked rural sector in a big way by launching electronic cards for farmers besides giving a big push to debit cards as the compnay saw India along with China as ’significant’ market in the coming years for card business. MasterCard Asia-Pacific region president Andre Sekulic said MasterCard which has grown at a record 38 per cent in 2000 in the region, proposed to focus in the unbanked sector in India after the successful launch of electronics cards in Philippines and Malaysia this year.

As 8.5 per cent of the transactions were still conducted by cash in unbanked sector, electronics cards provided the answer for secured payment system in the region and Indonesia, Thailand and India were next in the agenda, Mr Sekulic told PTI after the inauguration of the MasterCard three-day annual conference here to take stock of the the company’s performance.

With the successful launch of debit cards in 1997, MasterCard has crossed the one-billion mark in card transactions this year and as many as 12,000 transactions were carried out in the region every hour with the help of cards.

Elaborating on the India plan, MasterCards general manager for South and Southeast Asia, Sonny Sannon said electronic cards for kisans would be launched soon in collaboration with public sector banks which has the network in rural India.

“Soon we are going tap the rural market in a big way and these cards will be there within the next 12 months,” Mr Sannon said, adding the electronic cards would be like a purse that would contain for example Rs 5,000 or so at one time, which could be by way of loan or drawals from bank accounts by farmers.

The card would be a sort of purse for farmers to utilise for their purchases, he added.

Mr Sekulic and Mr Sannon said MasterCard’s PIN-based debit card is another area which had potential to grow manifold in India as all the 230 million bank account holders were potential customers. Unlike credit cards, debit cards entail online transfer of money from card holder’s bank account to the merchant for purchases.

With plastic money increasingly replacing transactions by cheque for daily and other needs, debit cards provided the answer for a secure payment besides curbing black money transactions and evasion of sales tax by merchants as cards transactions required proper invoicing. At present, there were 100 million MaterCard debit cards called Maestro in the Asia-Pacfic region since its launch in 1997. India had only one million MasterCards debit cards. There were additional 2.5 million MasterCards credit cards. With MasterCards and Visa cards put together, there were about seven million cards in the country.

With the launch of electronic cards for rural India this year and banks in India issuing debit cards to every new bank account holder, the plastic money business was expected to grow by leaps and bounds in India accounting for a large chunk of the four billion cards forecast for the Asia-Pacific region in the next three or four years. The growth of plastic money was slow in India initially, but last year alone it had achieved a remarkable growth of over 40 per cent and the number of merchants accepting card transactions had more than doubled from 12,000 to 25,000 in one year.

The Banks, which used to offer authorisation machine to merchants free to encourage card transactions, now offered the machine on rental to merchants in India in the face of growing demand.

MasterCard in collaboration with Satyam has set up a credit bureau to check frauds in card business.
The bureau has indexed as many as 2.5 lakh defaulters in card payment in the country. Banks verify from this negative file before issuing cards to new customers.

-- PTI