We are living amidst a digital revolution, and the latest technology is revamping every enterprise. Be it any industry, the pandemic impacted it all and pushed them towards a digital overhaul. The disruption of the financial sector is also evident.
In 20-21, the total digital transaction volume was at 4,371 crores (as against 3,412 crores in 2019-20)!
It is estimated that the global credit card industry will be $1.82 trillionby 2024. This growth in credit card payments is also due to major trends we witnessed in 2021, like:
- The popularity of bonus offerings – for example, spend x dollars in a month and earn y points, redeemable on an expense of z dollars next month.
- Buy now, pay later (BNPL) – there has been a great increase in the customer base attracted to such offers by third-party applications.
- Travel reward cards – as the pandemic restrictions eased in most countries, the travel rewards credit card business bloomed.
Similar to these, the 2022 trends for credit card companies are now under speculation. Here are the top three credit card trends to look out for, this year:
Diverse Rewards to Keep the Customers Hooked
In FY ’21, approximately 62 million credit cards were actively in use in India. Much of this growth has to be credited to the diverse range of rewards and discounts available on credit card payments. Rewards are provided as standards even on starter credit cards, and this year, the bonuses are only going to hike.
- Bonuses on tiers of expenditure:So far, we have seen a majority of bonuses and rewards on a lump sum expense. In 2022, the trend can further divulge into tiers that give customers extra incentives for spending more over a period of time. There will also be the prominence of ‘anniversary offers’ on credit cards to keep their customers around. Many cards can also rebrand themselves, like we saw The Platinum Card® from American Express, emerging as a lifestyle card with plenty of perks to choose from.
- Customers are in charge: Customers are always delighted to get more choices. Having options even in claiming rewards takes the joy a notch higher. This year, more companies can offer a category of rewards to pick from, as per the monthly credit card expense.
- The return of travel and food rewards: Hotels and airlines’ loyalty and reward programs had taken the backseat in the last two years. But in 2022, as the travel and food industries recover from the pandemic restrictions, it is a brilliant idea to hold onto the customers with rewards. These industries will generate revenue from these programs, while the customers, who are even a little calculative, can save a lot with their loyalty miles.
Enhanced Customer Service
When it comes to credit cards, customer experience has become supremely important. Most people are relying on apps to manage their bills and finances. As credit card companies join this league, we will hopefully head towards a seamless customer experience with more options to control finances from one platform.
- Easier card applications: Applying for credit cards used to be a huge hassle in the last few years. But as the paradigm shifts in favor of customer experience, applying for credit cards can get easier. Simply putting in the basic personal information and employment status should be enough.
- Better customer service options: With enhanced communication technology in 2022, there is no excuse for poor customer service. From 24 hours call services to request callback and chat features, all customer support options are going to further improve. Contacting the company through their native app and communicating from the app itself can finally become smoother.
- App support: With the emergence and popularity of credit card bill payment apps, companies are now realizing the potential of good app support. Most companies are not only improving their bill payment feature but are also developing apps to give a complete view of expenses and finances.
The Resurgence of Balance Transfer Credit Cards
Due to the pandemic, several card issuers had limited their services, considering that most people were going through hardships. As the economy revives, we can witness the resurgence of balance transfer offers at large. Some credit card companies have already started introducing it in late 2021.
- Choosing the right plan: Transferring the debt on one credit card to another for better benefits and a lower promotional interest rate is called a balance transfer. Customers opt for it as they can earn cashback or reward points on daily expenses, while paying no interest for 6-18 months, as per the introductory period.
- Introductory offers: Many people with good credit scores also wound up with outstanding debts in the last two years. But with introductory offers on balance transfer credit cards, they can clear their debts with a 0% annual percentage rate (APR), without paying any interest.
- Opportunity to develop a financial strategy: While balance transfer credit cards make it easier to pay off debt, customers should not make it their go-to panic response at all times. It should be a part of the planned financial strategy so that they spend as much as they need, not beyond their means. It is noteworthy that balance transfer credit cards are only issued to those with good credit scores.
Aligning With the Trends
With a shift to contactless payments and an increase in online shopping, credit card service providers are emerging as great beneficiaries. By aligning with the growing trends of 2022, they can leverage the disruption caused by new technology in the financial sector. At Verinite, we helppayment service providers and banks to incorporate innovative digital solutions. Looking for a partner to embark on a digital payment journey? Connect with us right away!
Magesh Ramanathan is a Delivery Manager in Verinite. Associated with BFSI domain from the start of the career. Believes in "Don't wait for the Opportunity, Create it". Football Fan and love to listen music