The card-issuing war that’s ignoring the digital revolution
The battle to be the dominant mobile wallet is founded on a simple premise: There’s no need to be top-of-wallet when your app is the entire wallet. Despite this, issuers are more aggressive — and innovative — than ever in making their physical card the top choice.
Some of this has to do with shifting demographics. As the gig economy and prepaid cards draw more people into mainstream banking, the card providers that serve these audiences are no longer competing primarily with cash; they’re competing with one another.
Green Dot, for example, has been thrust into this competitive landscape through its work with Apple and Uber.
“The roots of the company are the prepaid card, so a fairly low income demographic ... there, the problem is the opposite: It’s not [trying to be] top of wallet; you may be the only card in there,” said Mary Dent, CEO of Green Dot Bank, at SourceMedia’s Card Forum this week in Miami. Dent is one of PaymentsSource’s Most Influential Women in Payments for 2018.
Historically, Green Dot was competing primarily against other prepaid cards to be the one picked from the J-hooks of the stores that sell its products; today it’s competing just as much within the wallets of it customers, such as Uber drivers. Its recently launched Uber debit card offers two incentives to keep picking it throughout the day. In the morning, the card’s “backup balance” allows drivers to buy gas before they’ve earned their fares from rides; later on, its cash-back rewards at gas stations give drivers a reason to keep using the card to fill up.
Rival issuers strive to make their product the go-to card for the same audience, turning the physical wallet into the smallest — but most visible — billboard to reinforce their message.
Although the full design of the payment card matters, the most important part is the sliver that customers see when staring top-down into their wallets, said Adam S. Wahler, creative director for A to A Studios, in a presentation at Card Forum.
“I’m a huge fan of these colored cores,” Wahler said. “When you’re looking in your wallet, it stands out.”
The core is visible only along the thin edge of the card, but that tiny splash of color is enough to tell a PayPal credit card (blue) from a Discover card (orange) or Capital One 360 (red). The color of a black card or a gold card signifies prestige, even when the card itself doesn’t offer the perks to back it up.
The Circa Black Mastercard is “a prepaid metal debit card, which is extremely unusual,” Wahler said. “There are people who just don’t qualify for some of these high-end metal cards; however if you have an opportunity to buy a prepaid card, it gives you that psychological feeling of, ‘I have status.’ ”
India’s IndusInd bank uses a textured pattern near the card’s top edge, so it can be easily identified and pulled from the wallet without looking. Japan’s JCB offers a scented card, which it markets to women.
“I’m not saying it’s the perfect solution, but it’s definitely an interesting approach to marketing towards women in Japan,” Wahler said.
Al Hilal Bank’s Shariah-compliant card has an embedded digital compass to point to Mecca for prayers. The account also has features that align with its users’ faith, such as not charging interest and devoting part of its fee-based revenue to charity. “They’re respecting the faith and assisting in the rituals of their customer,” he said. “They’re truly working with them from payments to their actual beliefs.”
None of this translates to the mobile environment, Wahler noted.
In mobile, “it’s like there’s no experience,” he said. “When you have the mobile payment, it’s not your brand. All your mobile experience is, is your brand on someone else’s device.”
Of course, Green Dot begs to differ. It’s the issuer behind the Apple Pay Cash account, which enables P2P transfers among iPhone users and resides in Apple’s Wallet app.
“It’s a really first-rate user experience, and Apple continues to expand that and try to make that as compelling as possible,” Green Dot’s Dent said.