Payment technology must grapple with security, innovation and adaptive functionality. Ideas to revolutionize this market are already in full swing with different parts of the globe embracing a variety of modalities to engage customers. Yet there is one solution that addresses the needs across all countries, premium metal cards. Metal cards are gaining traction across international borders, meeting the generational divide, and enabling the fintech disruptors always looking to enhance the customer experience to attract and retain new customers.
The 2022 CompoSecure report on “Growth of Premium Metal Cards,” based on a global survey by Edgar, Dunn & Company, identified that metal card programs can be a powerful tool in promoting a positive feeling about a bank, attracting new customers and driving spending by keeping it top-of-wallet.
The survey of more than 18,000 consumers across 18 markets worldwide sought consumer attitudes on metal cards. Recognition and adoption of metal cards proved to be growing across all regions, while demand soared in the emerging markets of Asia Pacific and Latin America.
Asia Pacific – Influential and Interested
The APAC region has some of the strongest economies in the world with many of the wealthiest consumers and remains a coveted region for financial institutions. For card issuers, Asia Pacific accounts for approximately half of all credit cards in circulation – which as of 2021 is 3.2 billion, and of this, 1.5 billion are in Asia Pacific, with the majority in China and Japan. This region continues to drive demand for metal cards because the affluent want the premium feel of a metal card.
The survey found that the APAC region was the most familiar with metal cards- India (76%,) China (65%), Indonesia (59%), Singapore (49%) and Japan (46%). These figures are significantly higher than recognition in the U.S. (45%). Consumers in Turkey (72%), China (68%), India (89%) and Indonesia (89%) said they would have a more positive feeling about their bank because it offered metal cards. Respondents in India (72%) and Indonesia (72%) said they would leave their bank for another that offered a metal card with equivalent rewards and benefits. Five standout economies are prime targets for financial institutions seeking to implement premium metal card programs in Asia Pacific:
- India: An astounding 91% of respondents would select a metal card if the rewards and benefits were equal – the highest of any region. Further, 72% are willing to switch banks to get a metal card, up from 59% in the earlier survey.
- China: Payment issuers should take note of the potential to capture higher transaction volume with a metal card option because 82% of Chinese respondents indicated they would select a metal card over plastic if rewards and benefits are the same. Results are even higher among the coveted younger 25-34 demographic (89%) and the affluent (89%).
- Indonesia: Indonesia had the highest response of any region for feeling more positive about their bank if it offered a metal card (89%) and was among the highest response for opting to leave their current bank for a program with a metal card with equal rewards and benefits (72%).
- Singapore: 49% of respondents are aware of metal cards, while 29% of respondents who had not heard of a metal card before the survey would like one. 71% of respondents would select a metal over a plastic card if rewards and benefits are the same – a dramatic increase from 59% from three years ago. Singapore also had the highest response of survey respondents that prefer using a metal card for in-person transactions (31%).
- Japan: Awareness is growing in this critical market (46% this year, up 5% from the previous study). Younger and wealthier Japanese respondents also were more likely to change banks for one offering a metal card (71% affluent and 52% younger).
Latin America – Land of Opportunity
Latin America has long been unnoticed in the financial innovation space. However, the fintech market has doubled over the last three years in Latin America, shrinking the unbanked population to only 45% of the population.
Banks and other financial institutions are aiming their lens to this now booming region with consumers more knowledgeable than ever about their banking options. The study looked at two of the biggest players in Latin America and their consumers’ outlook on metal cards.
- Brazil: 65% of consumers are unfamiliar with metal cards, but almost 40% would like one. Metal card awareness has increased 10% since 2018, when only 25% of Brazilian consumers were familiar with metal cards. Even though 45% of Brazilian respondents did not know if their bank offered metal cards, 73% of them said that they would feel more positively about their bank if they were to offer metal cards and would change banks to have access to a metal card, assuming payment card benefits and rewards were the same. In line with consumer demand for sustainably sourced products globally, 87% of respondents would select a card made of eco-friendly materials if all the benefits and rewards were the same.
- Mexico: Almost half of the respondents in Mexico (47%) do not know if their bank offers metal cards, however, 88% of respondents would likely select a metal card over a plastic one if all the rewards and benefits were the same. 70% of Mexican respondents would leave their bank for another that offered a metal card.
As the industry looks to new and innovative ways to differentiate and elevate the customer experience, the appeal of the premium metal card could provide an important disruption to the payments market in these emerging markets. For more information on ”The Growth of Premium Metal Cards”, click here.