Issuers having a hard time keeping active spend?
 

In the past month, I have seen many surveys from different issuers trying to determine how to reinvent the card I currently hold from them. What caught my attention is how many different issuers were concerned their card needed changes at the same time. Definitely some sort of shift happening in card spend.

These are already pretty fantastic travel or bonus category cards, but I sense this idea of people wanting new features or reward programs all the time which are causing the design teams to rethink the existing programs. These cards likely have a million or more cardholders each as no AF cards, but maybe not so much in active wallet volume. They have been around awhile so I can see them collecting dust like old toys.

There are likely people who use a given card regularly and then others who move around for various reasons (SUB, better card, new shiny object).

In general, the proposed card redesigns have been to shift rewards to be more instant and trying to figure out how to do bonus categories differently. My math usually tells me that the proposed reward programs will net a lower reward than I currently get, which might be the real motive especially seeing how some issuers get buzz with relatively simple reward programs.

It looks to me that 2020 will continue to have a lot of changes, maybe to handle loopholes where rewards are too lucrative or to bring people back to cards that have been around awhile.

I admit that I sometimes wonder if I should switch to cards like some of the Visa Infinite ones, but I am likely too late as those programs are getting burned quickly.

How much of this is due to the Apple Card, rather than spending habits on existing cards per se? One of Apple Card's features is Daily Cash, after all, which gets deposited immediately after a transaction posts.

I suspect instant gratification would appeal to many. In any case, with the huge numbers of new cards being issued, I can’t blame the issuers for thrashing about trying to find a way to make their card stand out. If they can cut their costs you making changes “in response to customer feedback” I’m sure they’d like that even better.

That isn't unique to the Apple Card. As far as I know, both Barclays and CapitalOne offer instant accrual.

Are you aware, though, that many of these issuers have been doing such survey for many years, and yet rarely changing the cards (even though perhaps eventually doing so)? For example, Chase did IHG card surveys for about a decade before they finally revamped the IHG cards a year or two ago. I never got any of the surveys, but I kept reading about them on FT (not always in the same forum).

I'm not sure they ever promoted that heavily, though, unless I never noticed it before? (Other than being able to immediately redeem against travel expenses in the case of Arrival+.)

It could also be that some issuers are getting scared with the newer entrants into the space who are non financials or fintech types (Apple, Goldman, Brex, etc.)

The barriers to entry may not be as high as some of mega consumer banks had believed, and new players, burning up VC money, could torch all the margins for existing players.

So far Amazon has only chosen to co-brand with Chase/Amex but if they ever built an organic product that could be another threat to the current big 10 card issuers.

And we haven't really seen that much foreign banks in the US space. There's a little in Barclays and Marukai etc. but some of these Japanese banks are flush with deposits and ought to be desperate to earn some 15-25% interest bearing balances. Fortunately for the US issuers the general 1990s technology driven Japanese bank isn't a threat yet (faxing in card apps is not really a thing with US consumers....). But if someone like a Softbank glued together Mitsubishi UFG with a Brex/Strype type of provider we could also see another wave of competition.

I'd just like to (personally) see Discover/JCB get better as a 4th network to challenge the oligopoly of Visa/MC/Amex.

Inducing an existing cardholder to use a dormant account is, in many ways, the same as enrolling a new customer, and should be much less expensive. Tweaking the rewards program is more cost effective than offering a new account bonus.

I agree with this sentiment and have been a fan of this for some time now. Especially with the China merchant network connection, there seemed to be so much opportunity. What seems to be the case now is that Discover will continue to try and find a buyer. It hasn't gone well so far. Chase could have pulled the trigger, but Visa came in and made it unnecessary for Chase to do so (aside from the fact that Chase knows being on top of Visa is way easier to drive volume).

My thinking is that the government doesn't expect a foreign owned bank entity to be allowed to buy the network, but there doesn't seem to be appetite of an entity inside the US to buy the network. And a non-bank, fintech going this route seems unlikely at the moment since it seems being compliant with banking laws feels too restrictive to these VC banked entities, and they rather partner with member banks.

Could credit card companies be concerned about younger people using Venmo, PayPay and similar services more than traditional credit cards?

Those solve different problems than regular credit/debit cards. That said, millennials do supposedly use credit at far lower rates than older generations.

Maybe something like Wechat/Wepay kind of QR payment system could work here, especially as people experience it abroad and try it at home. I don't know much about that technology/UX but it would seem like it ought to be a threat to the big oligopoly. 200-300 bps of spread is enough to drive a truck through.....

We've got some vendors who push us to use Zelle, Venmo etc. These are not just PTA type of organizations which are more legitimately P2P, but real traditional merchants.

My basic rule with all that, is until I see a comparable discount, paying with credit is far more protective if anything goes wrong.

Venmo was arguably the closest to actually having a viable QR based system. Question is, why didn't they pull the trigger and officially allow business use of it?

Most websites that take PayPal typically have a merchant code that indicates both PayPal and Venmo acceptance. I don't think websites can opt not to take Venmo for merchant payment if they take PayPal. However, this is only for non IRL transactions.

We have better QR code chats in other threads, but I agree that bypass threat is still there, but I am unsure it is driving the card volume issues. Meaning, I don't see many transactions going back to non-card payment yet, but it could happen.

We have already seen an expansion of programs like Plan It from AmEx. Chase offered the failed blueprint option years back too, but these are not reward programs. PayPal offers a similar program.