Plink. Plink. Thunk!
“Ah, that third one sounds the best. That’s the credit card I want.” – a consumer today.
Yes, a surprising number of people care about the sound their credit card makes when dropped on the table at a high-end steakhouse (or Arby’s, we don’t judge). In fact, if you search for “credit card drop test” on YouTube, you’ll see videos with tens of thousands of views as creators test and rate the lovely sound of plastic/metal/composite hitting a surface.
Way back when, the only special emotion credit cards aroused was a sense of dread when the bill arrived. Today, as the global credit card industry expands and technology advances, we're seeing consumers treat payment cards not as a utilitarian tool, but as a class-defining luxury item. This phenomenon presents incredible opportunities for both customers and businesses – and also hints at where we’re heading as an industry. So, let’s dive into the idea of credit card differentiation, and how card issuers have to find new ways to keep their status-minded customers engaged and coming back for more.
Why Consumers Want Cool Credit Cards
Today’s consumers, especially Millennials and Gen Z, are interested in custom artwork on their cards, vertically-oriented cards, cards with LED lights, and cards with colored edges that stand out in stacks. In short, people want their credit cards to be unique because they want to feel special and stand out. More than just a device for transactions, credit cards are becoming a popular way to differentiate yourself from everyone else.
And that’s not a bad thing. It’s the same impulse that drives commerce in apparel, hair styling, footwear, cars, accessories... you name it. Differentiation has been a driving force in the economy forever. And after all, the original Diners Club card had exclusivity built into the premise along with convenience. The recent interest in fancy cards is nothing new, it’s merely that manufacturing technology has caught up to imagination in the industry.
In a survey, Gen Z and Millennials reported high levels of interest in differentiated cards and – most crucially for the industry – were willing to pay a premium for cooler materials and designs. They would even pay companies to convert plastic card into metal ones.
Why Issuers Are Leaning into Card Differentiation
Of course, issuers know that many of their customers will pay for differentiation and that’s why we’re seeing a slew of innovative cards show up in today’s market. Banks know that if they create and market a card that can tap into the “cool” factor, they can upcharge customers and create a new steam of revenue. Suddenly, a product that was a simple necessity is becoming a profitable channel for banks and fintechs.
Today, there’s a quiet arms race going on between card companies who are all competing to offer their cardholders the latest and greatest in credit card innovation. This is because issuers stand to increase:
Market share: By offering cooler credit cards, businesses can lure customers away from competitors.
Customer retention: Not only will unique cards attract more customers but will also help keep customers who don’t want to lose access to their special credit cards.
Credit usage: An enhanced user experience promotes card use, which means more incoming transaction fees.
Brand reputation: Being seen as an innovator in the credit card market can enhance a company's reputation and brand.
Whales: Premium cards tend to attract premium customers (see AmEx). Acquiring users who spend more is good business for card companies.
And as the world continues to go digital, a physical card is one of the few remaining tactile links between a customer and the financial institution. Having one is still a rite-of-passage and it’s just more fun for customers to show off a physical card than whatever mobile app a bank can develop when they are out with friends. This means that cards embody precious real estate for strengthening a bank’s brand.
Why Credit Card Differentiation is Difficult
Turns out, there’s only so much you can do with an extremely thin rectangle – why do you think smartphones are all pretty much the same these days? There are only a few credit card differentiators to choose from. Here are the four main categories:
Material: Various metals, including gold, are the new thing these days, but card manufacturers have been experimenting with a few other materials including wood, composite plastic, recycled sea plastic, polylactic acid (PLA, a plastic substitute that is biodegradable), and even glass.
Design: It’s possible to whip out a card that lights up with LEDs when used, or that features your baby’s face as artwork. The design of a card is a classic way to differentiate one bank’s card from another, and it’s becoming more common to see cards with art from top celebrity designers, unique patterns, shimmers, and more.
Perks: From cashback to airline miles to 24/7 concierge services, credit cards come with some unique perks as perhaps the most common form of differentiation. And these perks can get weird. One list runs the gamut from points towards magic equipment, to free Hello Kitty merchandise, to a chance at a tourist flight to space. Of course, these perks have nothing to do with the physical card itself, so it often takes a ton of extra marketing to make consumers aware of this type of differentiation.
Function: Perhaps the most interesting form of credit card differentiation, function refers to the physical card itself being able to do something unique compared to others. This includes cards that come with an embedded fingerprint reader or that can be used as a cold storage crypto wallet. Because of the size of credit cards, adding extra functionality is rare because it is a giant engineering challenge.
EVC: Differentiation with a Purpose
Then there’s the newest card differentiator: EVC (Ellipse Verification Code). The battery-free EVC micromodule puts an e-paper screen that displays a 3 or 4-digit dynamic security code right on the card, replacing the printed security code on the back of most credit cards. This provides a new level of fraud protection, but also makes EVC-Ready cards one of the more unique cards available today.
At a time when banks are looking for additional revenue from their credit and debit cards, EVC provides that “wow” factor that consumers would pay for, as well as the core benefit of preventing card-not-present fraud. It’s differentiation with a purpose.
As the credit card industry continues to evolve, businesses that prioritize meaningful innovation, like EVC, will not only capture attention but also foster trust and loyalty among their customers. So, whether you’re a company looking to lead the pack or a consumer seeking the next big thing, remember this: differentiation isn’t just about standing out - it’s about standing for something that matters.
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