Product Design in UK Plastic Cards - What can be learnt from Abroad?

Table of Contents

• Overview
  • Catalyst
  • Summary
• Table of Contents
• Table of figures
• Table of tables
• Product Design in the UK - What can be Learnt from Abroad?
  • Introduction
  • Account management is of increasing importance to issuers
    • One way of encouraging good account management is to reward on time payments
      • In the US, Discover launched the Motiva card, that rewards on time payments
      • In Australia, ANZ Bank has also launched a product that incentivizes the paying off of balances
    • Aside from reward programs, issuers can encourage disciplined account management through other product features
      • In the US, Wal-Mart has introduced a prepaid card to help families budget
    • Issuers can also help cardholders by making it easier to make payments
      • In the US, both Citi and Bank of America have introduced mobile banking services
    • Cards and Payments Team' s view on cards that reward good account management
  • Issuers in North America have been innovative in linking card products to long-term financial commitments
    • One issue with this type of reward scheme is the compatibility of the mortgages of other financial services providers
      • In Canada, MBNA and MCAP launched a co-brand card
      • In the US, the largest mortgage lender has launched a credit card product
      • In a related move, in the US American Express has launched a product that allows cardholders to pay their monthly mortgage repayments from their American Express card
    • Cards and Payments Team' s view on cards that are linked to mortgage products
  • Customer segmentation is an area in which UK issuers could learn from foreign issuers
    • Issuers in several countries have launched card products that are aimed specifically at men and women
      • In Greece, Citibank has launched a credit card aimed at male card owners
      • In Australia ANZ Bank has launched a website for its female customers
      • In the US, American Express has issued a series of cards based on location
    • Cards and Payments Team view on segmenting customers
  • The next step from customer segmentation is product individualization
    • Some foreign issuers allow cardholders to put a photograph of their choice on the card
      • Spanish and Nordic issuers have been particularly innovative in this area
      • Cards and Payments Team view on customizing card appearance
    • Issuers in the Middle East continue to have impressive personalized loyalty systems, assisted by chip based technology
      • Mashreqbank' s WOW! Card rewards repeat purchases rather than transactional loyalty
      • Cards & Payments Team view on the individualization of loyalty products
    • A final way to customize a payment card is to allow card holders to select their own pricing structure
      • In the US, Capital One' s Card Lab allows cardholders to create their ideal card
      • Cards and Payment' s Team view on products that allow cardholders to select their own price structures
  • Summary
• APPENDIX
  • Definitions
    • Average transaction value
    • Balances outstanding
    • Charge card
    • Credit card
    • Interchange
  • Methodology
    • Primary research
    • Secondary research
  • Further reading
  • Ask the analyst
  • Datamonitor consulting
  • Disclaimer
• List of Tables
  • Table 1: Current relevant Datamonitor publications, 2008
  • Table 2: Future relevant Datamonitor publications, 2008
• List of Figures
  • Figure 1: The Discover Motiva card rewards on time payments, 2008
  • Figure 2: The ANZ Balance Visa rewards cardholders for paying off their balance, 2008
  • Figure 3: The Wal-Mart prepaid Visa card helps consumers manage limited funds, 2008
  • Figure 4: Credit cards linked to mortgage products can present a powerful proposition to homeowners, 2008
  • Figure 5: The MCAP card helps cardholders to reduce their mortgage terms, 2008
  • Figure 6: The Countrywide Visa can save cardholders more than $11,000 over ten years, 2008
  • Figure 7: La Caixa allows cardholders to personalize cards with their own photographs, 2008
  • Figure 8: Chips allow merchants to encourage repeat business, 2008
  • Figure 9: Chips can bring together a range of offers to make a compelling customer loyalty offering
  • Figure 10: Applicants can select their card features using Capital One' s Card Lab, 2008