Taiwan Banks Promote Debit Card Use

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More Taiwan banks have started offering cash rewards for debit card purchases to boost customer use and to offset expected losses should proposed legislation be approved that would lower credit card interest rates, according to a report from The China Post newspaper. In April, Taiwan lawmakers proposed capping the annual revolving interest rate for credit cards at 12.5%, down from the current 20%. No date has been set for a vote on the proposed legislation. Taiwan's largest credit card issuers will be affected the most by the proposal, according to a recent report from Citigroup Inc. Chinatrust Commercial Bank, Taiwan's largest credit card issuer, would see its interest income drop NT$1.4 billion (US$42 million or 32 million euro) and its after-tax net profit decline 10.1% if the new rate is enacted, according to the report. Chinatrust has yet to launch a debit card rewards program, a Chinatrust spokesperson tells CardLine Global. "But we will always consider the debit card as a great choice because of the much lower risk," the spokesperson says. Many Taiwan banks now offer cash rebates ranging from between 1% and 2% for debit card purchases, The China Post reports.

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