Has Covid-19 hastened the demise of co-branded cards?

Co-branded credit cards may be in for an uncertain future. While the rest of the payments world is spinning giddily amid a whirlwind of innovation, the co-branded credit card model remains stubbornly entrenched in a business model that’s barely changed for decades.

But the pandemic may yet force a revolutionary overhaul in the range of perks and experiences available, which may yet elevate co-brand cards to top-of-wallet again.

In the wake of the pandemic, co-branded credit card spending dropped significantly – but this highlights what’s been a long-standing trend.

As the Payment Yearbooks show, credit card issuance figures for 2019 and 2020 demonstrate continuing declines through bank consolidation, portfolio and underwriting restructuring.

Co-branded credit cards have always faced pressure to grab consumers’ attention with a widening array of loyalty programmes and special offers.

But at a time when economic realities lead to a tightening of perks, and consumers are becoming used to instantly tailored offers and discounts available through alternative digital payments, co-branded credit cards are in danger of being left behind.

And of course, the economic impact of the Covid-19 pandemic supressed credit card issuance across Europe. Co-branded travel cards in particular were unsurprisingly left bottom of wallet for most of 2020.

Other emerging challenges to the traditional co-brand card model come with the roll-out of instant payment schemes, Buy-Now-Pay-Later schemes, and account-to-account payments.

Immediate payments are going to create frictionless digital commerce and enable a financial world in which the entire payment process occurs seamlessly and immediately.

For the time being, co-branded cards continue to play a role in incentivising customers to spend, in partnership with retailers, supermarkets and car manufacturers (with airlines hoping for a recovery from 2022 onwards).

What remains to be seen is just how effective the traditional co-brand model will continue to be as a customer acquisition tool.

The Digital & Card Payment Yearbooks give a market leading and comprehensive, up-to-date picture of Digital and Card payment services including digital and card issuing, acquiring and processing business within 43 countries plus pan European and Eurasian overviews and more…

The reports are recognised through the payments industry as the most authoritative source for the Digital and Card payments business on the European and Eurasian payment markets.

The report comprises of 2 volumes – Volume 1 covers payments statistics of the 33 European countries and Volume 2 contains the Eurasian payments statistics on 10 countries. The European Payment Cards Yearbook 2020-21 and the Eurasian Payment Cards Yearbook 2020–21 are available to purchase as complete volumes or as individual country profiles.

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• Table of Contents highlighting key areas of research
• Sample profile outlining detail in the cards and payments section

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