As a long-time resident of Korea, Kevin William Kneebone often heard frequent complaints from his friends about the inconvenience of getting a credit card here.
Even if successful, they were either given a very low spending limit or required to leave a sizeable security deposit. After that, they had to grapple with billing statements and advisories written in Korean, with no Web sites or call centers to help them decipher the mailings.
"I felt there was a definite need to develop a product for foreign nationals living and working in Korea," said Kneebone, managing director and head of KEB`s credit card operation, explaining KEB`s new Expat Card.
KEB does not expect the bank to generate huge profits from the card but it hopes to carve out a niche as a leading bank whose strength lies in international operations, Kneebone said.
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The arrival of global financial giants - Citigroup Inc. and Standard Chartered Plc - has intensified the competition in Asia`s third-largest retail banking market. For KEB, the nation`s fifth-largest lender, it needs to focus on its core business areas and enhance profitability instead of aggressively expanding market share, industry analysts said.
The roll out of the first-of-its kind credit card for foreign residents is certainly a right move that will be watched by rivals, they said.
"There is a genuine market need for our Expat Card and this product supports our image as an international and upmarket card organization," Kneebone said after signing a strategic business alliance with the Korea Trade-Investment Promotion Agency yesterday.
Prior to joining KEB, the 55-year-old Australian worked for American Express International and Financial Services as a senior executive - mainly in Korea, Hong Kong and Australia.
Until now, domestic lenders have been reluctant to issue credit cards to foreigners - viewing them as credit risks who would leave the country without paying their bills. But KEB says it has developed a reasonable credit screening criteria that will ensure low risk.
Although KEB has no monetary arrangement with KOTRA, the KEB official said the state-run agency backs the development of credit cards for foreign residents.
The government has examined ways to improve the living environment for foreign residents as the nation has seen a large influx of foreign investment in recent years.
The KEB credit card is not only a local product modified for use by foreigners but a new product specially tailored to the needs of foreign residents in Korea, Kneebone said.
A key feature of the Expat Card is that all materials and support services will be in English including billing statements, a call centre, web page and special offers, he said.
The minimum credit line will be 2 million won with no maximum limit, depending on the creditworthiness of the applicant. KEB expects around 20,000 foreign residents in Korea in high income brackets to apply for the Expat Card. The applicant does not have to be a KEB account holder to apply for the card as long as they have a bank account in Korea with any bank.
The Expat Platinum Card, which is attached to a Visa card, will be accepted in the same manner as any other Visa card, the bank official said. It will be also accepted worldwide as all transactions will be billed in the normal manner on the cardholder`s monthly statement and denominated in won.
Expat Cards will be charged at the same interest rate as local Platinum cards that vary depending on the payment and credit history, the bank official said.
(jungmin@heraldcorp.com)

By Kim Jung-min