It is that time of year again – Black Friday and Cyber Monday are behind us and the cards, banking and payments sectors passed the test of record payments volumes with flying colours.
Now onto Christmas and the New Year. As is customary, the Christmas issue of Cards International contains a number of end of year reviews/2018 forecasts and it is gratifying that the comments are generally positive.
As the year drew to a close, the consumer press, always fans of gloomy news, have flagged up increasing cards loss rates. A fairer précis, certainly in North America, would be to highlight ongoing low unemployment rates and manageable debt to disposable income ratios.
With potential for improved net interest margin expansion and healthy scope for loan and purchase volume growth, the credit cards sector can justifiably end the year in good heart.
It remains fashionable for many to attack the incumbents as being held back by antique legacy systems; risk-averse cultures, no urgency and a complacent lack of innovation is the usual summary of complaints against the established players.
There is certainly no sign of complacency at Amex as witnessed by its new Platinum Card range of benefits.
Other recent launches of interest include Synchrony and PayPal’s cashback Mastercard and London Block Exchange’s Visa-branded prepaid card linked to an app to enable customers to spend and hold crypto-currencies.
The costs associated with the card: £20 to acquire plus 0.5% on all purchases/sales of crypto-currencies plus ATM withdrawal fees will put off many, but it will be interesting to track its success or otherwise.
Penny,an app that examines customers’ credit card activity to flag up any data breaches is also worthy of note.
Willingness to switch
According to Accenture, cardholders have never before been more willing to switch card issuer: 48% of consumers would switch their primary rewards card to get more value for their purchases and 42% would switch for a large up-front sign-up bonus.
Cardholders not only want more rewards – they want greater convenience and personalisation; according to Accenture, 76% of consumers want to redeem deals tied to their card when swiping at the point of sale.
First Annapolis has been arguing that current market conditions necessitate offering high rewards but that the level of growth in rewards value is unsustainable, so card execs need to consider other ways of investing in their loyalty programmes.
We are likely to see an acceleration of ATM-pooling; some of the brightest digital innovations will come from the regularly maligned incumbents-expect to see more from the likes of HSBC, Nordea, BBVA, Caixa and Emirates and a number of the more innovative banks in Poland.
A number of the higher profile new players such as Revolut and Monzo will continue to enjoy success in growing customer numbers; the former will find it much easier to monitise its business model.
PSD2 evangelists arguing that January and the coming of Open Banking will change everything will be disappointed – at least for some time.
Consumer appetite to share data is questionable in the short-term: a year from now, we will be talking about how 2019 will be the year that Open Banking may gather some momentum.
Meantime, a very hearty thank you to all subscribers, contributors, readers, events sponsors, press-officers and PRs, best wishes for a festive Christmas and good health and prosperity for 2018.