By Lee Moran, Director of Customer Operations at TAG Systems, member of AUSTRIACARD HOLDINGS
Cast you mind back five or six years to the pandemic. You might remember how many people declared the death of office because the working from home genie was out of the bottle and there was an assumption we would never go back. Things changed, and many people do work from home, or partly from home as a result, but it wasn’t the end of the office; it was a revolution in how we perceive office environments and the advantages of working there.
Now apply that thinking to payment cards. With the advent of digital wallets, there has been an assumption that cards would be consigned to history, in preference to the convenience of using a device that never leaves our hands, unless it’s to go in a bag or a pocket. But just like the office, cards provide a physical connection that is meaningful and permanent. So meaningful and permanent in fact, that digital first and digital only providers are now returning to the physical card.
Payment Cards for Fintechs and Crypto
From gold, to cash, to cards, to digital, the world of payments has evolved. While sticking stubbornly to using cards might be seen by some as the 21st century equivalent of keeping cash under the mattress, payment cards do something that cash never has – they give consumers a physical connection to their financial service provider’s brand. Instead of looking on payment cards as old tech, therefore, fintechs and crypto providers are seeing them as an opportunity.
In the past few months, TAG Systems has been approached about cards by a leading crypto provider, and has launched a card programme for a fintech. Both businesses were previously digital-only. In both cases the move to develop a card programme was in response to customer requests for cards, which highlights that offering customers the option of card payment is not just a matter of strategy; it’s also a customer service commitment that brings brand value to the wallet. Cards are a powerful tool for putting the brand physically and visibly into fintechs’ customers’ hands, so the question being asked by digital first providers is not ‘do we need payment cards?’ but ‘how can we make our payment cards aspirational brand statements?’
Achieving stand-out with payment cards
A payment card is more than a tool for completing transactions; it is an accessory. The assumption that digital natives reject physical alternatives overlooks the natural human instinct to signify identity and affiliation with belongings. The payment card industry has innovated with substrates, colours, finishes, formats, and customisation, enabling fintechs to differentiate and signal their future forward, dynamic, and agile brand values by providing a physical card that is both different and reassuringly familiar.
Fintechs are also leading the way in recognising that the connection between their brand and their customer begins long before any transaction. When consumers can choose or even customise their design, they feel invested in the card as a reflection of their own personality. Agile card manufacturing and personalisation gives consumers agency over a payment card that they may use – and be seen to be using – several times a day.
The card’s arrival is also a key staging post on that brand journey, and understanding the potential impact of the unboxing experience is central to building buy-in to using the card in preference to a digital wallet. The unit cost of a distinctive card in creative packaging may be higher, but the value of the talkability – often translated into online content as well as conventional word of mouth – is building fintech brands.
The Digital/Physical Hybrid Model
Just as the 100% in the office we knew in 2019, and the 100% working from home we experienced in 2020 has settled into varying degrees of hybrid working, it seems likely we’ll see a similar pattern with a combination of payment cards and digital wallets. A new generation is already gaining its financial literacy with tailored card programmes and prepaid cards, so cards remain trusted and familiar, with none of the risk or anxiety associated with a dying mobile phone battery.
As we expect more and more functionality from our digital devices, using a digital wallet to make a payment while holding a conversation, taking a picture, watching a video, or scrolling social media is not always the most convenient option. Our consumer research indicates that people value choice, with many digital natives and early adopters comfortable with using both payment cards and digital wallets.
Fintechs are innovators by definition, but new ideas don’t have to be digital to be innovative. Sometimes the most innovative approach of all is to reimagine something proven to make it fresh and relevant, and that’s exactly what fintechs are doing with payment cards.
