Winners / Selection Rationale

Credit Saison Credit Card business

2012 12th Porter Prize Winner Credit card services
Redefined the credit card service as a daily financial service to support shoppers, instead of being just a status symbol.

Industry Background

../../data/img__2012_02_p.jpgThe credit card industry in Japan is made up of three strategic groups. The first group comprises the subsidiaries of banks, which include Sumitomo Mitsui Financial Group with the largest market share of 17.5%, and Mitsubishi UFJ Financial Group with the market share of 16.2%. The second group is affiliated with private companies in certain industries, such as retailers (Aeon Credit with a market share of 8.2%) and manufacturers (Toyota Finance with a market share of 7.0%). This group targets the customers of their parent companies and their credit cards are called "the house card". The third group consists of independent credit card issuers, and includes Credit Saison, which has the second-largest market share of 17.2%. (Market shares are based on issuers' data in 2011)

Executive Summary

Credit Saison targets female shoppers, who were not target customers of industry incumbents. It has continuously introduced new innovations that went against industry norms.

Originally a subsidiary of Saison Group, it handled the house card, and gradually expanded its customer base. Now, it has 35 million cardholders and an annual transaction volume of 6 trillion yen, the second-largest in Japan. No other house card has been able to evolve sufficiently to reach this stage.

Unique Value Proposition

When Credit Saison launched its service in 1982, industry incumbents were positioning credit cards as a status symbol. By promoting them as a daily financial service, Credit Saison offered a unique value proposition. The incumbents targeted individuals who had worked for more than ten years at one of Japan's well-established companies and owned their own homes. In contrast, Credit Saison decided to target women as its main customer segment. It issued a credit card to anyone who could be reached by telephone at the number the customer had registered. In the early years, the majority of its customers were women in their twenties and thirties who shopped at Seibu Department Store, one of the subsidiaries of the Saison Group. Even today, 70% of Saison cardholders are women.

Based on its value proposition of being a "daily financial service," Credit Saison provides convenience. Since its began in 1982, it has been issuing credit cards on the spot that can be used immediately, without charging a membership fee. (It provides this service at 60 service counters, out of its total of 140 counters.) This is especially important for Credit Saison, because it is aiming to increase the number of new card members among shoppers, when they visit a store to shop. In 1992, it introduced a method of authorization that does not require a signature at Seiyu Supermarket stores.

The user fees for a Saison card are much lower, on average, than those charged by competitors. In addition to requiring no annual fee, in 2002 Credit Saison introduced an Eikyufumetsu Point system (lit. eternally imperishable points). Customers can use and earn their points by shopping at the online mall, in which a variety of web-based retailers are enrolled (a customer can earn 20 times as many points at, compared with other retailers, whether online or real stores). This system encourages customers to use their points, which are now worth 70 billion yen in total. Its premium card, the Saison American Express Card, charges an annual fee of only 3,150 yen for the Blue card, 10,500 yen for the Gold card, and 21,000 yen for the Platinum card, despite providing almost the same services as the original American Express Card. The Saison American Express Card has attracted many card members, again mainly women.

As explained above, Credit Saison puts priority on generating revenue through customers' shopping transactions rather than through membership fees. For Credit Saison, "good customers" are those customers who use its credit card more often, not those who have great financial credit but only limited shopping needs.

Credit Saison introduced a variety of financial services to cross sell to its customers. These services include an online ticketing service called e+, investment trusts, the shared ownership of a racehorse, lease and rental services, mortgage loans, and credit guarantee services.

Unique Value Chain

Credit Saison is the first credit card issuer in Japan that offers credit cards from four card services (VISA, MasterCard, American Express, and JCB).

Obtaining new card members
Sixty-five percent of the employees of Credit Saison are working in the sales function to increase credit card membership. Credit Saison operates 140 service counters inside the stores of numerous affiliated retailers, and the company's employees are assigned to these service counters. No other industry players invest in this function to this extent. Instead, they rely on their alliance partners to obtain new card members.

Credit Saison periodically examines the profitability of its 140 service counters, and continuously closes unprofitable counters and opens new ones in other locations.

Credit Saison makes it easier for customers to become card members by issuing a credit card within thirty minutes. This is possible through the use of a proprietary software program that was developed in 1996 based on its original credit screening know-how. The application process is done on a tablet PC and does not involve any paper.

Service to card members
Credit Saison provides several services to encourage card members to use the credit card more often. It introduced a method of authorization that does not require a signature in Seiyu Supermarket stores, Eikyufumetsu Points (lit. eternally imperishable points), and the online mall

Service to retailers
In order to increase the sales of affiliated retailers, it makes suggestions to affiliated retailers, based on analyses of consumer behavior outside a particular store, facilitates the planning of sales promotion campaigns involving stores in the same geographic area, and helps retailers to communicate to card members through emails and magazines. These services are provided by the sales force, namely, from ten sales offices and 140 Saison Counters. The sales force is deeply rooted in the local community, and sales personnel implement their duties in cooperation with affiliated retailers.

Bill collection and dunning
Credit Saison positions the activities of collection and dunning as "advising and consulting services." Although many industry players rely on the tacit skills of seasoned staff members, Credit Saison has developed a system that enables anyone to do a good job. The system relies on operation manuals and requires investment in an ICT system. Only 10% of the call center staff are full-time employees (the rest are part-timers).

In 2007, together with Mizuho Bank and UC Card, Credit Saison established a subsidiary that conducts credit screenings, the issuance of cards, the management of the credit limit, billing, and call center activities. It provides these services to its competitors. It enjoys cost leadership with economies of scale.

Human resource management
Credit Saison is trying to develop an organization where women can flourish. All the shop managers at Saison service counters are women, and 50% of the corporate officers are women. Employee evaluations are based solely on performance, not on age, educational background, or business experience. Credit Saison is trying to develop innovative employees and create an "open, frank and innovative" corporate culture. It refers to its corporate culture as "a corporate culture based on humanism."

Firm infrastructure
Credit Saison aggressively forms alliance with other companies, especially from the retail, finance and telecommunications service industries, to issue different types of credit cards. At the same time, it monitors the profitability of each credit card business, and if it does not reach the internal hurdle rate, Credit Saison will terminate that business. It also monitors the profitability of its card services counters, and relocates the ones that are unprofitable.

The company leverages its capabilities in credit screening and the management of credit risk, and has diversified into other financial services, such as investment trusts, which can be cross sold to card members.

Fit among Activities

Credit Saison's activity systems are selected and coordinated around its corporate vision to be the "Leading Edge Service Company." The main strategic choices include offering services that customers would want in their daily lives--those that are convenient, useful, and provide peace of mind; cultivating a community-based sales force to increase card membership; achieving low-cost operations that support the competitiveness of its services; and fostering a corporate culture that is based on humanism, one that is "open, frank and innovative." The fit among activities is good. For example, Credit Saison no longer sends members a new card if the previous card has not been used for three years. This has resulted in lower costs. It is able to do this without the customer's prior consent because it does not charge an annual fee. (Please refer to Credit Saison Credit Card Business' activity system map, which appears at the end of this report.)

Innovation that Enabled Strategy

  • On-the-spot issuance of credit cards with no annual fee requirement (since 1982, a first in the industry).
  • Introduced a cash dispenser for making a cashing advance (in 1982, a first in the industry).
  • Introduced international cards--VISA and MasterCard--with no annual fee (in 1988, a first in the industry).
  • Introduced a method of authorization that does not require a signature on the groceries floor of Seiyu Supermarket stores (in 1990, a first in the industry).
  • Introduced an optical character reader (OCR) in the application process (in 1992, a first in the industry).
  • Introduced Eikyufumetsu Points (in 2002, a first in the industry).
  • Started an online mall to encourage card members to use their points and earn points by shopping at the mall (in 2006, a first in the industry).
  • Introduced the Saison American Express Card, which has the centurion logo. It was the first time for American Express to allow affiliated cards to carry this logo (in 2010, a first in the industry).

Consistency of Strategy Over Time

Credit Saison started its business in 1982 by issuing the Seibu Card as the "house card" for the department store. It transformed itself from a house card issuer into an independent card issuer by striking alliances with various business partners, mainly in the retail industry. Despite this transformation, the core components of its strategy have remained unchanged: 1) work to improve the alliance partners' customer service and increase their sales; and 2) position the credit card as a daily financial service and enhance customer convenience by introducing innovative services. It introduced the on-the-spot issuance of credit cards and with no annual fee requirement when it started its business, which were both industry-firsts. It continues to introduce first-in-the-industry innovations. Although it introduced a membership fee for its American Express Card, its membership fee is set at a very reasonable level compared with the benefits that the card provides. It puts priority on customer convenience and the generation of revenue through customers' shopping transactions rather than through membership fees.


  • Does not position the credit card as a status symbol.
  • Does not enter the acquiring side of the credit card business, where bank-affiliated credit card companies were already dominant. Focuses on the issuing side of the business.
  • Keep investment in TV commercials at a minimum level, but instead advertises on-site in retailers' stores.
  • Does not rely on the tacit skills of seasoned staff members for consultations and dunning activities.


Both return on invested capital and return on sales exceed the industry average.

Return on invested capital (ROIC)   (Unit = percentage point)
Difference from industry averag
over 5 year period
Difference from industry average, by year
2007 2008 2009 2010 2011
1.9%P 1.7%P 1.7%P 2.0%P 0.9%P 0.3%P
Inter quartile range (IQR) = 1.2%P
Return on invested capital = Operating income / Average invested capital

Return on sales (ROS)   (Unit = percentage point)
Difference from industry average
over 5 year period
Difference from industry average, by year
2007 2008 2009 2010 2011
7.5%P 3.1%P 6.4%P 5.4%P 0.1%P -6.2%P
IQR = 28.5%P
Return on sales =Operating income / Net sales

Activity System Map

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