But the banks issuing those cards – that is the banks whose actual customers owned the cards and who issued those customers the credit – quickly realised that 47-odd square centimetres of plastic was valuable real estate. Consumers would see their brand every time they reached for the card.
"The latest era of digital wallet development (it’s not the first) will be genuinely disruptive.”
So the Visa and MasterCard (and JCB et al) brands were reduced to small logos on bank-branded cards for the issuers like ANZ or HSBC or Bank of America. That also paved the way for the cards to become “multi-function” – representing not just a credit card but offering access to transaction accounts and ATMs, for example.
Owning the customer
The cards were kept in purses and wallets but no bank ever successfully branded what fundamentally has been a fashion item, one which also stored physical cash, licences, loyalist cards, security swipes, photos etc. Vogue never featured a Citibank clutch.
Today there’s an argument the digital world is different. That an institution – which may be a tech company or entertainment group or phone provider or a bank or something else – can own the purse or wallet.
And if it does own the wallet, then it has a much better chance of “owning” the customer – which means being the intermediary for a much greater array of products and services; not just financial services but government and lifestyle services. And that greater “share of wallet” translates into revenue opportunities.
Indeed, according to global financial intelligence consultancy Lafferty, this latest era of digital wallet development (it’s not the first) will be genuinely disruptive.
“In late 2018, we analysed more than one hundred case studies compiled during the production of the Lafferty Retail Banking 2020 series, and noted the most prominent category of innovative services in every region was mobile wallets,” Lafferty said in launching a new mobile wallet report.
“Today, also every major tech player from Alipay to Amazon is offering its own mobile wallet, where virtual cards can sit alongside airline passes, digital loyalty cards, digital assets and cryptocurrencies and digital identities.”
For Lafferty, digital wallets are not just a handy app but a genuine disruptor in their own right: “grown on mobile phones, these services are representing an enormous threat to banks and card networks alike, especially as real-time payments come online around the world. Mobile wallets could be a huge disintermediator of cards, as shown by the success of Alipay and WeChatPay. Visa and Mastercard have been investing hugely in real time payments to keep up.”