Credit card numbers are on the decline in Australia and statistics from the banking sector show that 15.8 million cards were in circulation mid-2019, compared 16.8 million two years ago. Many attribute the decline to the rise in digital alternative options like Afterpay and Zip Pay which allow the consumer to buy now and pay later, but the more likely cause seems to lie elsewhere.
Is the consumer turning his back on credit cards?
Looking at the fate of the cheque book, consumers often wonder if credit cards, debit cards and virtual cards are about to end up forgotten and unused in their purses and pockets. These payment methods have not kept up with the fast-paced changes and experiences that the digital and mobile world offers consumers. As a matter of fact, when compared to the personalized experience that shoppers and viewers are experiencing daily, credit cards are not only completely impersonal but also not very flexible.
However, it is highly unlikely that Australian cardholders will turn their backs on their credit cards and it is expected that Australian banking institutions are about to adopt some of the changes already enjoyed in some overseas markets.
How will the consumers benefit from these changes?
The benefits of these new innovative cards will include changes in how they function and there will be several benefits that will offer value to the consumer. These benefits include personalization, increased value, more options and installment credit, all very attractive options for the consumer.
How will credit cards meet the need for personalization?
Consumers today are spoiled because their favorite sites understand them and their needs. Whether they are shopping on Amazon for a book, browsing on Netflix or Spotify for entertainment or about to order some take-outs, they are offered tailored options according to their previous shopping experience.
This personalized experience is something that credit cards in Australia have not been able to offer; well, until now that is. Coming soon, credit cards will offer benefits that will match its owner’s preferences. One of the main features of these will be rewards programs and the great thing about them is that they will be flexible, so that if there are changes to their lifestyle they won’t be lost. This flexibility is what consumers are coming to expect in all spheres of their lives, and their credit card is no exception.
How can consumers get more value from their cards?
The convenience for which credit cards are known is about to become even better. Up until now consumers could make purchases and worry about paying for them at a later date, something which was so convenient that it was embraced for decades.
Since consumer expectations are demanding even more value from their financial products, card providers have come up with some innovative ideas that have proven to be popular in other countries. One of these is the introduction of micro investments from a rounding-off of purchase amounts. The card is integrated to third-party services like Drivewealth and Raiz and the amounts are invested in shares or exchange-traded funds.
Up until now merchant loyalty programs required that the consumer carry varieties of cards in order to complete purchases or have a downloaded app for each store on the smartphone. Bank cards will now be directly linked to the stores and loyalty points will be earned and redeemed automatically with the payment.