The credit card protection plan (CPP) was introduced in India recently. How long has it been available in the UK? How has the response been?
The concept of plastic card protection has been around for 30 years or so. It originated in the US and then went to the UK. Since then it has moved around the world.
CPP is an essential accessory for someone who carries any form of plastic—debit, credit, loyalty or membership card. We are there to support consumers if they lose their wallet or misplace their card.
The response has been outstanding in the UK. You can look at 60 per cent of the UK market [including past and present users].
Why was CPP launched in India?
Roughly, there are 150 million bankable customers in India and the number is growing. So, strategically, India is a very important market for us. The 150 million bankable customers in India are using around 125 million debit and credit cards. That, on an average, is under one card per person. In the UK, only 50 million bankable customers would be using around 140 million pieces of plastic [debit and credit cards].
What’s the reason behind this?
The reason is the stage of development of the plastic market in the UK compared to India. Over the next 5-10 years, we see two things happening in India. First, the number of cards per bankable customer will increase from less than one to around three. Second, rise in the number of bankable customers with the growth in the Indian economy and the financial services sector that supports it.
Due to the current financial turbulence, banks have tightened their credit appraisal process for issuing cards. This was not so, say, two to three years back. In this scenario, what do you have to say about the growth of plastic in India?
Effectively, we are a service company; we are not a bank or a financial services company. What you are seeing now [as a result of the economic environment] is the increased level of caution on the part of banks with respect to consumer finance. The number of new cards issued at present is much lower than what it was one to two years ago. But, still many customers do not have CPP. The number of new cards issued over the next 12-24 months would be less than normal. But once the economy begins to move up, the growth of card issuance will resume to its former level.
How has the response been in India?
The response has been excellent. We are around three months old in India. We are working with four leading banks now. We are in discussions with other banks, too.
After the launch in India, how many enquiries did you get?
The operations in India are at a very nascent stage and it will not be right to share the numbers at the moment. In the UK, we currently have around 5 million customers. The UK market is a fraction of the size that the Indian market will become. Already, there are 150 million customers in India compared to the 50 million customers in the UK. We foresee the Indian market to become as big as the UK market.
As of now, CPP India has tied up with Citibank, Standard Chartered Bank, Kotak Mahindra Bank and HSBC. Are you looking at more partnerships in the future?
Primarily, we partner with debit and credit card issuers, but we are also open to store value card issuers, retail companies or insurance companies. In the years to come, we hope to be a product in every bank’s portfolio.
CPP can be bought from one of the four partner banks or from CPP India directly. Which route is more advisable?
We have a website for our India operations, so customers can come to us directly. We also have a contact centre in India. Instead of spending money on marketing and brand development directed towards the consumer, we pay our partners a commission so that they use their distribution channels to promote our product. You can buy the product directly from us, but it’s not our primary distribution method. Going through our partner banks is a better option.
How do you plan to educate potential customers?
Our bank partners advertise the product through their channels. CPP is not a difficult product to describe. Everybody understands what can happen if they lose their card. Also, it’s an inexpensive assistance product. The communication will be a combination of background awareness, advertising by our partners and direct mailing. There will be specific communication via telephone as well.
What other measures can a card-holder take to avoid misuse of the card?
First, do not let the card out of your possession. Make sure you’ve signed it. I am still amazed how often people write down their PIN number on a piece of paper and keep it in their wallet. Also, if you feel that your card could be misused at a particular merchant establishment, don’t use it there. If the issuing bank offers a specific security feature [like authorisation to process a transaction above a specific limit], opt for it. Research, however, shows that when people steal a card, they tend to use it for small purchases because it is easier to escape detection. As a result, you need to report the loss of a card as quickly as possible. Do not wait for a few hours, because that’s when the fraud occurs. There is plenty of research to show that fraud on the card happens in the first 3-5 hours of the loss of the card.
CPP sets a pre-notification limit. In case misuse of a lost card results in a loss that is more than this limit, how much would CPP India refund? How long would it take to do so?We generally process claims within 14 days. We would only refund up to the limit. We use the limit to establish joint responsibility with the consumer. If there was no pre-notification limit, the consumer would not be in a hurry to report the loss thinking he is covered for an unlimited amount. This would not be reasonable to us.
How To Take Card Protection?
Call 6000-4000 (prefix city code if calling from a mobile)
Choose your preferred plan
Register your cards
Membership annual
Fee for single ownership of a classic card is Rs 995 and a premium card is Rs 1,295
Fee for joint holding of a classic card is Rs 1,495 and a premium card is Rs 1,945
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