A metal payment card is the Rolls-Royce of the banking industry. The mostly affluent consumers who gravitate toward these high-end cards seek products that reflect their premium lifestyle. When they check out at the jewelry store or pick up the tab at a five-star restaurant, these consumers want the world to see their exclusive status. A metal credit or debit card has no counterpart in terms of product design and sleekness. As ABI Research reports, the number of metal payment cards issued annually will increase from 36.1 million in 2022 to 85.1 million in 2028.

 This article will answer the following key questions:

• Why is metal payment card issuance on the rise in the banking industry?
• Who exactly should banks, financial institutions, and smart card vendors be targeting?  
• What is the market outlook for metal payment cards in each major region?

Chart 1: Metal Payment Card Shipments by Region

(World Markets: 2021 to 2028)

(Source: ABI Research)

Market Drivers for Metal Payment Cards

Between consumer preferences and business benefits, there are several reasons why demand for metal payment cards is growing. Below are five key market drivers for this innovative banking technology.

1. Premium Card Vanity: When you look at a metal payment card, it screams “elite.” The same goes for when you hold it in your hand; the metal card has a superior feel and weight to it.

1. Customer Importance: The metal payment card attracts VIP banking customers who appreciate exclusivity. These types of customers seek products that make them feel a level of prestige.
2. Business Distinction: Banks and smart card vendors that issue metal payment cards gain the advantage of having brand differentiation. Issuers can use various metal combinations, metal types, and personalization features to stand out from the rest of the payment card market. For example, CompoSecure is piloting a metal payment card with Light Emitting (Diode) capabilities.
3. Retaining Users: High-end products such as metal payment cards increase customer stickiness for banks.
4. Wallet/Brand Reputation: A compelling metal card solution achieves top-of-wallet status with regular usage and visibility, alongside brand perception and relationships for the issuer.

Target Market for Metal Payment Cards

Historically, the banking industry has offered metal payment cards exclusively for the High-Net-Worth (HNW) segment. Suppose this trend is sustained, then vendor revenue opportunity would be limited. Thankfully, this is not the case, as neo and challenger banks (fintech) have begun offering lower-spec metal cards to their respective customers. These developments have allowed the banking industry to expand its customer base from HMW to a mass affluent clientele. In some cases, banks have even been able to target millennial segments with their metal payment cards.

All these customer segments share one common trait: they are willing to pay more for products that align with their lifestyle and values. These customers are using payment cards as a fashion statement, reflecting their style and interests. In a social media-driven world, a metal payment card can be used by affluent consumers to drive a wedge between them and the mainstream. These are status-conscious customers, motivated by the prospect of feeling like VIPs.

One thing threatening the appeal of metal payment cards to affluent consumers is the low-cost offerings from fintech companies. Neo and challenger banks are making metal payment cards accessible to the average consumer by baking in the price with nominal monthly fees (as opposed to a high one-lump sum). This, in turn, has significantly mitigated the cost barrier that has prohibited many consumers from purchasing a metal credit/debit card. When anyone can get their hands on a metal payment card, it takes the exclusivity factor out of the product offering. Therefore, it's critical that the metal card market preserve a degree of its niche branding and premium price tags to retain its exclusivity.

Going forward, the banking industry must cater to two distinct segments: the affluent and the mass market. For affluent customer bases, next-generation payment card suppliers should use the most high-end metal types to construct a fully metal card, as the price is of little concern. This way, card issuers can offer superior products at a higher cost.

Meanwhile, Polyvinyl Chloride (PVC)/metal and metal edge can be used to construct metal credit/debit cards targeting mass markets. ABI Research expects PVC/metal and metal edge form factors to account for most metal card shipments through 2028. This will be due to payment card vendors aiming to penetrate socioeconomic-sensitive regions like Latin America and the Middle East & Africa.

Metal Payment Cards by Region

While the metal payment card market is on an upward trajectory, regional considerations exist. Different regions have different growth rates and different vendors capitalizing on the market opportunity for premium credit/debit cards. ABI Research makes the following conclusions about the major regions:

• North America: Consumers in the United States have some of the highest purchasing power in the world, making it the most significant customer base for high-end metal payment cards. Metal payment cards already have a firm foothold in the region, with shipments expected to increase from 24.8 million in 2022 to 34 million in 2028. Large banks native to the United States, such as Chase, Amex, JP Morgan, and Wells Fargo, drive significant growth for metal payment cards in North America. New offerings from neo and challenger banks like Chime and N26 accompany these traditional market players.
• Europe: Like North America, Europe is a mature market for metal payment cards, resulting in a slow growth pace. Moreover, the underbanked addressable market is negligible in the region. Nevertheless, major smart card vendors like IDEMIA, Giesecke+Devrient (G+D), and Thales, as well as neo/challenger banks, such as Curve, Monzo, and Revolut, will help establish Europe as the second-largest market opportunity for metal credit/debit card issuance. According to our market forecasts, metal payment card issuance in Europe will increase from 4.8 million shipments in 2022 to 13.3 million in 2028.
• Asia-Pacific: Tier One smart card vendors all cater to the Asia-Pacific region, in addition to local card suppliers (Kona I, ICK,  Goldpac, etc.). Many fintech banks in Asia serve underbanked regions, making metal payment cards an effective way to migrate customers to subscription-based accounts. These factors will help propel metal payment card shipments from 3.7 million annually in 2022 to 15.6 million in 2028. Due to price-sensitivity in many Asia-Pacific countries, PVC/metal and metal edge form factors will lead the way.
• Latin America: There is a growing presence of neo and challenger banks issuing metal payment cards in Latin America. Fintech companies like Nubank and C6 Bank offer dazzling card designs and attractive features, which serve the metal payment card market well. ABI Research forecasts that metal payment card shipments in Latin America will increase from 1.7 million in 2022 to 17.3 million in 2028. Due to socioeconomic factors, full metal cards will be nascent, and most shipments will be the lower-priced PVC/metal and metal edge form factors.
• Middle East & Africa: HNW has been the primary target audience for metal card suppliers in the Middle East & Africa region, particularly with prestige full metal offerings in the United Arab Emirates (UAE). However, ABI Research expects that PVC/metal card variants will gradually outpace full metal payment cards in the coming years. These lower-priced offerings will be key to unlocking the full potential of metal credit/debit cards in the cost-sensitive countries within the Middle East & Africa. By 2028, the region will issue about 5 million metal payment cards annually, a more than 2X growth rate since 2022.

Survey the best metal payment card vendors and how they win business with banks by reading our Selecting the Right Smart Card Vendor for Metal-Based Payment Solutions Research Highlight.