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“New Generation of Premium Credit Cards”: A Firm’s Challenge & Success Story of Entering the Japanese Market (Part 1)
An interview with a credit card industry pioneer, Luxury Card Head of Asia (Part 1)
FinTech is taking the financial industry by storm. As world-wide ubiquity of mobile payments take off, the credit card industry is also faced with new opportunities.
Luxury Card (http://www.luxurycard.com/), which was first founded in America in 2008 as a credit card company targeting affluent customers, counting business executives and celebrities as cardholders, has now become a popular topic among American business executives. In November 2016, the company opened its first international office in Japan, as a step to make Luxury Card a global brand. Hamilton Hayashi, now Luxury Card Head of Asia, was appointed to lead this international expansion. The company introduced Japan’s only Mastercard top-tier card level, World Elite Mastercard, to the Japanese market, offering three options of premium credit cards: the Mastercard® Gold CardTM, the Mastercard® Black CardTM, and the Mastercard® Titanium CardTM.
What sort of challenges did Mr. Hayashi overcome while establishing the business in Japan? We asked him about his success behind establishing a brand from scratch, his thoughts on the future of the credit card industry, and his vision for Luxury Card.
— — What sparked your interest in starting Luxury Card in Japan and what was your career path leading up to it?
In 2001, I started my career at Citigroup in New York after graduating from Columbia University with my undergraduate and graduate degrees. Citigroup is a global financial company with offices in 160 countries–the idea that I may be able to work on projects that span multiple continents intrigued me. At Citigroup, I started in investment banking, transitioned to investor relations, then business development. In 2007, I had the opportunity to join Citi Cards Japan team to help revitalize the Citi Cards and Diners Club portfolios as Consumer Product Head. I returned to the US in 2011 and joined JP Morgan Chase in 2012 to focus on business development. Then in 2014, the founder of Luxury Card asked me to lead the company’s international expansion with Japan as the first country to launch. When I returned to Japan in 2014, I was surprised to find out that Japan’s credit card industry has remained rather stagnant compared to other countries.
I noticed in America, credit card companies constantly refresh services and benefits to keep up with market competition; however, in Japan, the evolution takes place at a much slower pace. When most people think of credit cards, they will think of it as just a “payment method” or a “transaction”. I wanted to think outside the box, and started to develop an idea of marketing it as a service—a service that could enhance people’s quality of life.
The founders’ vision of introducing new generation premium credit cards resonated with me and I wanted to be a part of that vision in revolutionizing the credit card industry.
— —Did you have any hesitation about leaving your position at such a globally renowned company when accepting your offer from Luxury Card?
I definitely contemplated my decision but I had made the most out of my time at Citigroup and JP Morgan Chase. I challenged myself on new projects and gained valuable experiences. However, as being part of a large corporation, the higher I moved up in the organization, I spent more time in meetings and on internal management duties. Deep inside I wanted to spend my time focusing on providing value to our clients.
I also felt this was a once-in-a-lifetime opportunity where I can challenge myself in starting up a business. I also wanted to test myself and my abilities as a manager without the backup of big-name corporations or brands.
Moreover, I was really encouraged and touched by the founder’s belief in me, to trust me with his company’s future. This was the biggest deciding factor for me and I was determined to exceed their expectations.
— — Among all the countries offering premium credit cards, why was Japan chosen as the first foreign market to tap into?
One of the biggest criteria was whether a country has a sizable affluent population and it supports credit cards with high annual fees. Considering these criteria, Japan, Singapore, Hong Kong and China came up. The founder’s idea was, “when expanding internationally, challenge yourself by starting with the most difficult country.” The Japan market was considered to be relatively the most challenging to crack, but that experience will be a major foothold for further international expansion, and that was why Japan was chosen.
— — What are some of the features of Luxury Card and what makes it stand out?
Firstly, the card’s state of the art design gives off a “luxurious” feel. All three of the Luxury Cards are finished with patented metal design, the highest tier card is coated in 24K gold. For engraving the Mastercard logo, we use a special technique that takes each card more than 20 minutes to complete. Why go through such extent? Because our vision for Luxury Card is not just a means of financial transaction, we wanted to create a credit card with the highest craftsmanship and attention to detail that gives a sense of accomplishment and joy to the client every time they take out their card.
As for services, our global concierge services are available 24 hours a day, 365 days a year. The concierge acts like one’s own executive assistant and can support a wide variety of inquiries, such as “Can you research and book a restaurant I can take my VIP guests to?”, “My family is moving overseas, can you find a good school district my child can attend?”, “Can you help me plan my engagement proposal for my girlfriend?” etc. In addition, we offer valuable and popular benefits in travel, dining and lifestyle, including global airport lounge access, luxury hotel privileges like room upgrade, complimentary breakfast and hotel credit at leading global hotel chains such as The Ritz-Carlton, The Peninsula, Bulgari and Mandarin Oriental.
— — Starting a new company in Japan and creating a new credit card service must have been daunting. What were the steps you took in establishing the business?
In expanding Luxury Card, we could not have done it without partnering with banks that issue credit cards. Our first big task was to find an issue partner who fit with us. I spent most of my days during the first two and a half years on my own, going to as many banks in Japan, submitting numerous partnership proposals. What really got me through those days was the encouragement I received from my former colleagues and business partners during my tenure at Citi Cards Japan. Their belief that I could do it, along with my persistence, enabled me to find the right partner at Shinsei Bank Group. With Shinsei Bank Group and Mastercard, I am confident that Luxury Card has found the ideal partners with whom to redefine Japan’s premium credit card market.