Credit cards have become a staple in every consumer’s wallet. And credit cards are still a leading payment mechanism for in-store and online purchases. But the industry needs to follow consumer trends to maintain its coveted position on top. Here are the top five trends shaping the credit card industry in 2021.
Consumers demand contactless
The rise of contactless payments began before the COVID-19 pandemic. But the pandemic certainly accelerated the shift toward mobile payment technology. Many consumers now feel uncertain about paying with cash or even handing over a card to another person, with 82% of people seeing contactless as a cleaner way to pay, according to Mastercard.
And that means companies will need to innovate and iterate on features like mobile wallets and RFID technology to meet consumer demand and alleviate contact concerns.
Rewards need to stay competitive
Because of the pandemic, many credit card companies shifted to offer cash back on everyday items like groceries and streaming services. And thanks to a year of lost travel, many companies offering travel credit cards were forced to shift to offer non-travel rewards to encourage spending.
Cardholders may also choose to apply rewards to the card balance to stay on top of debt repayment. If you’ve been struggling with paying off your balance monthly, consider drawing up a debt repayment plan and using a debt snowball calculator to help plan your path to debt freedom.
As cardholders continue to spend more time and more money at home, a broad suite of reward options is something companies will need to offer to remain competitive.
Top-notch customer service is mandatory
In 2021, poor experiences with customer service can go viral in a click. And cardholders expect to receive excellent customer service with every interaction or take it to the online world to resolve their issue.
Some credit card companies are already noticing this shift. For example, Discover started a marketing campaign so its customers know, “We treat you like you’d treat you.” Other companies would be wise to follow suit and note the increased demand for quality interactions. This information can help guide marketing and customer service plans accordingly.
Demand for transparency
Confusing rewards redemption processes and hidden fees are becoming a thing of the past. Consumers are demanding increased transparency from companies across the board.
And that means credit card companies need to be upfront about how customers earn and use rewards, offer access to credit scores and monitoring, and be explicit about fees. Heightened transparency is one element that can help increase consumer confidence to find new customers and retain existing ones.
Privacy and identity protection are critical
Fraud and identity theft are more rampant than ever. And customers will go to great lengths to protect their identity online. “Masked” (speaking of trends) credit cards are one way consumers are looking to make secure purchases. These disposable card numbers can be created and disabled quickly for use on websites with a poor reputation for security.
Credit card companies will need to offer these types of protection and remain transparent about who can access and use personal information.
The bottom line
As consumer behavior continues to evolve, credit card companies need to adapt to stay relevant. An increased desire for digital offerings and rewards, a greater emphasis on customer service, and demand for transparency are five trends that will shape the credit card industry in 2021 and beyond.
Sources:
Mastercard
Discover