MTNL (Mahanagar Telephone Nigam Ltd) went in for a second marriage recently for its customers' convenience. To facilitate telephone bill payment through credit cards, MTNL tied the knot with MasterCard International in May this year. Barely a month later, it has announced its tie-up with American Express.
However, this time things are a little different for at the press conference was announced also the launch of the country's first co-branded telecom credit card, the MTNL American Express Credit Card, which has its own distinctive features.
But despite its several obvious advantages, the MTNL American Express credit card seems to be a little disappointing when it comes to the interest rate on the credit. The card charges a monthly interest rate of 2.89 per cent on outstanding credit, though the American Express, the payment service provider of the card, claims that the rate is lower than what other major credit card issuers charge.
MTNL's earlier alliance with MasterCard International was so devised that irrespective of the issuer, a MasterCard card holder could pay his MTNL telephone bills, pay for new telephone or Internet connections and other MTNL services through his credit card at designated MTNL counters with centralised billing systems and at selected Indian Oil petrol pumps with no extra service charge. The rate of interest on credit availed by a MasterCard holder for paying his telephone bills through his credit card, however, would be fixed by the individual issuer.
The MTNL American Express card also allows the user to pay MTNL telephone bills through a credit facility with no extra service charge. Plus it gives some added benefits to the card holder.
The first one is in the form of a cash incentive. By paying his MTNL telephone bill through the co-branded card, a card holder will get a cash back of 1.7 per cent on the phone charges billed to the card annually. This cash back will, however, be adjusted yearly to the credit outstanding of the cardholder and will be reflected in the card member's credit statement. This cash incentive is being given by MTNL to induce its subscribers to pay their phone bills through the MTNL American Express credit card.
MTNL's endeavour in roping in the two leading payment service providers aims at doing away with the hassles of cash receipts as far as possible and ensuring quicker payment of telephone bills by its telephone and Internet service subscribers. Paying bills through plastic money also removes the need for subscribers to have to stand in long queues to pay their bills in cash.
The MTNL American Express credit card also entails a free Caller Line Identification (CLI) facility for the card holder. This facility otherwise requires a subscriber to pay a subscription of Rs 600 annually to MTNL. MTNL and American Express also propose to approach the manufacturers of telephone instruments to allow card holders a discount on the purchase of CLI-enabled instruments, which generally cost more than an ordinary instrument.
American Express, the issuer of the MTNL Amex credit cards, has not yet pegged a general maximum limit to the credit permissible on the card. "In fact, things are being worked out and the maximum limit permissible will depend on the financial soundness of the card holder," said Sanjay Rishi, vice-president and country manager, American Express Travel Related Services, India.
According to Rishi, a number of parameters are being worked out to determine the creditworthiness of an applicant and the maximum credit limit will be set according to the applicant's compliance with those parameters.
Once the credit limit is set, an MTNL Amex card holder will also have the facility to withdraw cash in advance using the American Express Bank's ATMs.
The maximum limit on such advances has been fixed at 20 per cent of the maximum permissible credit limit to one's credit card.
However, only people with an annual income of Rs 72,000 and above can apply for the MTNL Amex credit card. For a basic card-where the cardholder is billed in his or her name-the annual fee is Rs 750 and for each supplementary card-where cardholder will be billed through the basic cardholder's bill-the annual fee is Rs 375.
The MTNL Amex card also allows card holders the facility whereby they can transfer their outstanding balances from other credit cards to the MTNL Amex credit card at an annual interest rate of 1.99 per cent. The co-branded card also provides for an travel accident insurance-for an air accident, the sum insured is a maximum of Rs 5 lakh, for others, a maximum Rs 2 lakh.
Be it through the MasterCard credit card or through the MTNL American Express credit card, MTNL has made life very comfortable for its subscribers. And that is a welcome feature.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.