Citigroup, the U.S. banking giant, announced on Tuesday (Feb. 26) the launch of a new service that lets users pay their rent and school expenses each month with one of its credit cards.
CNBC reported that the digital payment service, dubbed PayAll, can be accessed through the Citi mobile app. Each transaction will have an associated fee that is payable to the bank, with the average transaction at about $3,500. The service is now live in Singapore and is expected to roll out in Hong Kong, the United Arab Emirates and Thailand by the end of 2019, noted the report. Over time, Citigroup plans to add additional categories for which credit cards can be used.
Sergio Zanatti, Citi’s head of cards and unsecured lending for Asia Pacific, told CNBC that Asia has been trailblazing in Citigroup's bank and mobile lending services. “We saw a significant 44 percent growth in digital lending penetration in 2018,” he told CNBC. He added that the new capabilities provide customers with “more value on their spend.”
Asia has long been a leader in terms of internet and smartphone penetration. As CNBC pointed out, Southeast Asia is estimated to have an internet economy of more than $240 billion by 2025.
Typically, big payments such as rent or student expenses are handled via recurring bank transfers. With the Citi service, users in Asia will be able “enjoy a free financing period” by charging rents to the credit card, as the amount is not immediately debited from the account, Zanatti told CNBC. Customers also can earn rewards points and airline miles.
Citigroup has recently been investing heavily in technology to keep up with the FinTech startups that have been disrupting the financial services market.