(Reprint from The Miami News, Money Section, October 20, 1981, by Merwin Sigale)
Miami's Latin American ties are taking on a broader dimension as wealthy Latin investors rush to invest in South Florida and local businesses seek new trade opportunities to the south. Miami News Business Editor Merwin Sigale traveled to seven Latin American countries for a look at "Miami's Latin Connection." This is the 12th story in a series.
GUAYAQUIL, Ecuador — Give thousands of free-spending Ecuadoreans a credit card, turn them loose in Miami and listen to those cash registers ring.
Officials of Filanbanco, Ecuador's third-largest bank, are hoping that's what will happen. This month, they introduced their Filancard to Miami. They claim it's the first Latin American credit card accepted by commercial establishments anywhere in the United States.
Filancard (pronounced FEEL-ahn-card) is the most widely held credit card in Ecuador, with 22,000 card-holders and estimated 1981 credit-card sales of $18.4 million. But Miami is the first city outside of Ecuador in which it has been marketed. "Miami is the shopping paradise," explained Miguel Baduy, who as first manager is one of Filanbanco's top executives.
"They're already honoring the card in some establishments," said Roberto Isaias, vice president of Filanbanco. He, his two brothers and their uncle, Nahim Isaias, own Filanbanco as well as 63 per cent of the Republic National Bank of Miami.
Baduy said that 100,00 Ecuadoreans a year travel to Miami, and "I calculate that 10,000 are going to spend their vacation in Miami." It's those 10,000 who are the main targets of Filancard's attempt to expand its customer base to 30,000 by year-end.
"We know where they make their purchases, and those stores, hotels and restaurants are being made affiliates," said Baduy. He mentioned Omni as one of those being approached. (Ella Tabri, comptroller of Omni International Hotel, said yesterday, "We received a proposal from them. We have not made a decision on it yet.")
Baduy said he was encouraged by free-spending Ecuadoreans who used the Visa card in Miami, Visa, which also is handled by Filanbanco, has 3,500 card-holders in Ecuador.
"Fifty-seven persons last October used Visa in Miami and spent $525,000," Baduy said. "That's almost $10,000 per person. Incredible!"
Qualifications for Filanbanco's Visa card are stricter than for its Filancard. Also, unlike Visa billing in the United States, Ecuadorean holders of Visa cards must pay in full when they are billed. Filancard, on the other hand, offers revolving credit with an interest rate of one per cent a month plus a service charge of one per cent. A consumer pays $100 to get a Visa card but $40 for a Filancard.
So Baduy sees a potential new market for the bank's own card with an international acceptance as the lure. He said Panama would be the second new market for the card, with January the intended date for introducing it. Orlando is on the future list, too, to serve Ecuadoreans who visit Walt Disney World.
Baduy said the bank also is considering an extension of the card to Chile, Colombia, Peru and Venezuela. "We want it to be an Andean Pact card," he said. "And as far as we're concerned, Miami is a part of Latin America. To us, Miami seems more Latin American than American."
Baduy said he's aiming for up to 400 Miami-area establishments that would honor the Filanbanco card. He said, though, that he doesn't expect the card operation to be highly profitable. "The profit is the service to our clients," he said.
Filancard has established a two-man office in downtown Miami. Filanbanco itself has a new representative office in Miami to refer international business to the home office in Guayaquil. Still another enterprise of the Isaias family, the Navicon shipping line, has just set up a small agency in Miami.
Baduy said Filanbanco has been working on the concept of placing its card in Miami since May 1980. He said Banco Nacional de Mexico, which issues its own Banamex card, sent six specialists to Guayaquil to help with the planning.
Filancard actually has two cards, differing in color and reflecting different credit limits. Its beige card allows up to $1,000 in purchases. Its silver card has a limit ranging from $1,000 to $8,000.
One of Filanbanco's competitors expressed admiration for its development of Filancard. "I must admit they've done very well with it," said Leonaredo Stagg, manager of the international division at Banco del Pacifico, Ecuador's biggest bank.
Baduy proudly points out that "the only cards in the world in the Galapagos are Visa and Filancard." The Galapagos are sparsely populated Ecuadorean islands, famous for their surviving animal species, and Baduy concedes, "Actually, all that's used in the Galapagos is Visa, because they're tourists."
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