SINGAPORE (Sept 13): United Overseas Bank, which owns the largest credit card market share in Singapore, has introduced a way for digital credit cards to be issued to the smartphones of existing customers within minutes.

By giving customers almost instant access to new cards, this will make it easier for them to take advantage of card-specific discounts and promotions.

In addition, customers can also ask for an instant replacement if they misplace the cards.

“This is an era of instant gratification,” explains Dennis Khoo, UOB’s head of personal financial services, at a media briefing on Tuesday.

UOB’s latest move in the highly-competitive credit card space comes amid a local stagnant market.

According to the Monetary Authority of Singapore, as of July, there were a total of 9.4 million cards issued, down from 9.7 million cards a year ago. Total spending for July 2016 topped S$3.95 billion, barely up from S$3.92 billion last year.

Khoo attributes the tepid spending to the weak economy. Nevertheless, the bank says it has gained market share from the competition. “Obviously, we are doing the right things,” he says.

Available by end October, applications for the digital cards can be made via UOB’s existing multi-function smartphone app "UOB Mighty".

For a start, UOB One Card, UOB Delight Credit Card, UOB YOLO and UOB PRVI Miles World MasterCard will be available digitally. The usual annual fees will apply for these digital cards.

Khoo says while the bank may be putting pressure on its margins by making it so easy for cardholders to enjoy discounts from merchants, UOB will get to enjoy volume growth while customers can build longer relationships with the merchants.

Indeed, volume numbers are pointing to the right direction. The bank says that since the launch of mobile contactless payments last year, the number of active users – defined as those who make a transaction every month – has reached around 250,000. Use of mobile contactless payment has surged 20 times. As a whole, their transaction volume has hits “millions” of dollars per month from just a fraction of that.

The bank predicts that by 2020, one out of every five UOB card transactions will be done via smartphones equipped with contactless capabilities.

Khoo hopes to see the use of mobile contactless payments on public transport systems as the next big step.

In addition, the bank has announced the gradual introduction of ATMs that comes with so-called Near Field Communication (NFC) capabilities.

This allows customers to withdraw cash from UOB ATMs by tapping their NFC-enabled smartphones on the new machines, instead of sticking in their ATM cards and keying in their PIN numbers. “This is another way for us to help customers thin their wallets,” says Khoo.

By January next year, at least 60 UOB ATMs will come with this capability and the bank plans to have it installed on all 634 ATM locations island-wide by Dec 2018.

Aaron Chiew, the bank’s head of mobile strategy notes this is part of a planned ATM replacement.

Down the road, the bank will allow NFC-enabled capabilities to be used for other transactions done like cash withdrawal, says Chiew.