Signs of a percolating Mexican credit card market are beginning to emerge with the announcement that Banca Serfin, one of the country's largest banks, with $21 billion of assets, and Aeromexico, the nation's largest airline, are set to launch a cobranded Visa product.

"Credit cards are a new concept in Mexico," said a Visa spokesman, "and cobranding is entirely new."

MasterCard International engineered the first cobranded card in Mexico earlier this year when Banco Internacional and Mexicana airline formed a partnership. So far, the program has 50,000 cardholders, 25,000 of whom came from the airline's 200,000-member frequent flier program.

The Banco Internacional MasterCard, however, had some early problems. There were complications pertaining to Mexicana's customer data base and the airline had control over the marketing and advertising of the product, which turned out to be a mistake, said Alfred Pepping, MasterCard's manager of marketing in Mexico.

Banco Internacional has since taken over the promotion of the product and is reintroducing its card to both the general public and to the airline's frequent flier customers.

Banca Serfin, which has about 1.5 million credit card accounts, expects to issue more than 500,000 cards with Aeromexico by targeting the airline's frequent flier customers first.

The terms of the card are still being developed, but a Visa spokesman said that the product will have an annual fee, and cardholders will earn one kilometer of travel on Aeromexico for every $1 equivalent spent on the card.

Brazil, Chile, and Argentina have also caught the credit card fever that has heated up the U.S. market. There are more than 200 cobranded Visa International programs in Latin America and 270 cobranded MasterCard International programs. Only a handful of American banks, including Citicorp, are issuing credit cards in Mexico, and 26 Visa members, primarily Mexican banks, are issuing the association's brand in Mexico.

Michele Turkel, a co-founder of Spectrum International Corp. of Scarsdale, N.Y., who was hired as a consultant by Banco Serfin to help design the cobranded part of the product, expects the Aeromexico/Banco Serfin partnership to expand the bank's portfolio substantially.

Ms. Turkel said that there is more credit card ownership in Mexico, which is the seventh-largest credit card market in the world, than in any other country in Latin America.

Currently Banco Serfin promotes its credit card product primarily through its 600 branches throughout Mexico, but it has never sent out preapproved solicitations or targeted consumers outside its customer base.

Ms. Turkel expects the Aeromexico/Banco Serfin alliance to be profitable, partly because the airline's frequent flier program targeted Mexican consumers with higher-than-average incomes.

"Aeromexico has spent a lot of money coddling these customers," noted Ms. Turkel.

Aeromexico was a hotly sought-after partner. "Everyone was running to Aeromexico," said Ms. Turkel.

Another desirable institution, Banamex S.A, Mexico's largest bank, signed a deal this week with K mart Mexico S.A. to issue the department store's private label credit card. K mart Mexico is a joint venture of K mart Corp. and the Mexican department store chain El Puerto de Liverpool S.A, and the private label card will be valid only in the store's franchises in Mexico.

Despite the apparent interest among Mexican banks in credit card programs, and particularly in cobranding, Mexican financial institutions still have many challenges ahead of them.

For example, there is only one credit bureau in Mexico and it does not encourage prescreening potential customers. The credit bureau, called Batum, restricts banks from submitting large lists of consumers whose credit records the bank wants to evaluate for prescreening purposes.

It is likely that one of the American credit bureaus will either replace Batum or compete with it, as discussions between the major U.S. credit bureaus and credit card processing companies have begun.

Fraud and a poor postal system are also major concerns of the Mexican credit card industry. As a result, financial institutions send out messengers to hand deliver new credit cards.

Obtaining credit is very expensive for Mexican consumers. Banks typically charge an application processing fee ranging from $25 to $50 in addition to an annual fee, and interest rates hover around 36%.

Still, Ms. Turkel believes that Mexico is ripe for a competitive marketplace, partly because Mexican consumers are already persuaded of the merits of borrowing or using credit. "Culturally," said Ms. Turkel, "Mexico is a credit-user society."

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