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Citi says customers can now pay for rent and school fees using its credit cards


U.S. banking group Citi said Tuesday it is launching a digital payment service that allows users to pay rent and school fees every month using the bank’s credit cards.

Singapore where average transactions are around $3,500. The service is expected to be available in Hong Kong, the United Arab Emirates and Thailand by the end of the year. Additional spending categories are expected to be introduced over time, the bank said.

Asia has pioneered the bank’s digital and mobile lending services, which are then rolled out globally, Sergio Zanatti, head of cards and unsecured lending in Asia Pacific at Citi, told CNBC.

“We saw a significant 44% growth in digital lending penetration in 2018,” he said, adding the new service will give customers “more value on their spend.”

To keep up with start-ups that have been disrupting the banking and financial services space, banks have increasingly embraced the use of technology in their day-to-day businesses. Many of them have moved their consumer banking services online and onto mobile apps, making it easier for users to make payments, apply for credit cards or transfer money to others with ease.

For its part, Asia is leading the charge in internet penetration and the adoption of smartphones with massive markets in countries such as China, India and Indonesia. Southeast Asia, for example, is predicted to have an internet economy exceeding $240 billion by 2025, making it a lucrative region for companies to test out new products and services.

Still, traditional banks like Citi have to compete with start-ups that are often leaner in their operations due to the use of technology. In addition, after the chaos and disruption of the 2008 global crisis, customers have come to trust technology more than they do in established financial institutions.

Large payments such as rent are usually done through recurring bank transfers. However, Citi’s Zanatti explained, users can “enjoy a free financing period” by charging rents to a credit card, since the amount is not immediately debited from their accounts. Customers can also receive Citi reward points as well as airline miles, something that “represents a significant benefit” to those users, according to Zanatti.

Last year, the bank said it was shifting its focus from physical branches in the region to its digital banking services — which included improving retail banking and credit card services on its mobile app, spending more of its advertising budget on digital ads, and creating systems that allow people to apply for cards online.


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