Helsinki-base Euroloan is launching a virtual credit card in its target market of Finland, Sweden, Poland and Denmark.
Virtual credit cards will initially be offered in four different price groups, with APRs of 9.9%, 14.9%, 39.9% and 51.0%. “Price groups allow more effective management of credit risk, enabling us to profitably offer our services to a much bigger group of customers. Giving every customer an individual loan offer based on careful analysis is also better customer service. We can offer lower rates to prime customers that actively take care of their financial situation”, says Mr. Samuli Korpinen, Country Manager Finland.
The company sees its virtual card product as complementary to physical credit cards, which it plans on offering.
“The annual market for credit cards is over 1 trillion Euros in our target markets and the majority of the industry is controlled by bank-owned finance companies. The increasing regulation of banks brings new opportunities for independent finance companies. The regulatory environment for credit cards is stable and the operating model is easily scalable across national borders. A natural continuation of a virtual credit card service would, in the future, include also a physical credit card “, according to Mr. Lindfors. The company believes that this new approach will significantly reduce European regulatory risk, improve business profitability, and increase sales volume.
The new product will be launched this spring, although new credit regulations restricting APRs are being introduced in the home market of Finland in June. While this will surely change the product landscape, demand for flexible consumer credit products is expected to continue.
