This article first appeared in The Edge Financial Daily, on September 14, 2016.

KUALA LUMPUR: Visa International (Asia-Pacific) LLC and Bank Islam Malaysia Bhd, a wholly-owned subsidiary of BIMB Holdings Bhd, have issued Asia-Pacific’s first syariah-compliant business credit card.

At the card’s launch ceremony yesterday, Visa International’s Malaysia country manager Ng Kong Boon said one of its features is that it allows the user to have instant claim on value-added tax on their spending abroad via this card.

Ng said the target market for this new business credit card is small and medium enterprises, and he is bullish on market acceptance based on the fact that one-third of Malaysia’s gross domestic product comes from this segment.

Bank Islam managing director Datuk Seri Zukri Samat, on the other hand, said the new offering is to increase the bank’s portfolio and product mix.

“We believe the multiple benefits of this product make it especially attractive in the current environment, where businesses demand greater convenience to support their operations,” he said.

According to Ng, from June 1 last year to end-May this year, Visa’s credit card transactions in Malaysia amounted to US$20 billion.

“Out of the total transaction value, about 10% was business credit, and 30% of this US$2 billion was related to online and cross-border transactions,” he said.

Dubbed the Bank Islam Visa Infinite Business Card-i, its privileges include no compounding finance charges, 20-day profit-charge-free period, lifetime annual fee waiver, and financing limit up to RM250,000.

“The Business Card-i enables businesses to separate and consolidate business-related spending in one card and the detailed monthly statement eases the tracking of this spending,” Zukri said.

He added that with this new offering, Bank Islam hopes to reach 10% of its current corporate and commercial customer base of about 200,000 clients in the first three years.

Meanwhile, the bank’s deputy chief executive officer Khairul Kamarudin said so far, the credit card segment is contributing 5% of BIMB’s total revenue, and management intends to double the figure in the next three years.

Currently, Khairul said, BIMB has about 150,000 active credit cardholders and two million debit cardholders.

As at June 30 this year, credit cards represented 1.2% (RM444.89 million) of BIMB’s total financing portfolio of RM37.03 billion.

BIMB closed unchanged at RM4.02 yesterday, valuing the banking group at RM6.39 billion.