Metal Payment Card Projects Invigorate Growth in the Next-Generation Market

The next-generation payment card market is experiencing a period of significant growth, driven by banking customers seeking premium and compelling alternatives to the traditional Polyvinyl Chloride Acetate (PVC) payment card. As it relates to metal cards, customers are being offered not simply just a luxurious look and feel, but, increasingly, advanced features to drive an enhanced overall user experience. The metal payment card market is seeing new innovations Year-over-Year (YoY), be it new metal composites, design features, or the inclusion of next-generation payment card technologies, such as Light Emitting Diodes (LEDs). Banks and fintechs are striving to capture the attention of users and grow their customers bases—attractive metal cards have proven to work for affluent customers by building brand loyalty through innovative card offerings.

As a result, the payment card market is seeing regular new tenders and partnerships growing to expand the range and reach of the metal payment card, with many projects being launched despite short-term macroeconomic and geopolitical uncertainties in the form of COVID-19, the chipset shortage, and the increased scrutiny being placed on sustainability.

While the metal payment card is not a new innovation itself, having existed as a substrate for over 20 years, it is a more modern card type for regions like Latin America, Europe, and Asia-Pacific. While issuance has existed in moderate volumes within the United States for a number of years, and the United States is considered the regional champion as it relates to metal payment card penetration and growth, many new projects are cropping up in different areas, expanding the reach of this market segment:

• The banking group Absa, deployed its new and rebranded vertical metal cards in August 2023, offered to all bank account types and with design innovations in black and “smart metal” cards. The new solution will arrive in the market with embossing in the form of an African basket-weave design and, as it relates to customer target segments, will be pushed across a range of entry-level customers, up to and including High Net Worth (HNW) clientele. The initial launch will be made available to private banking and HNW customers, then expanded to further market segments later in the launch. This is aligned with ABI Research’s expectations for the metal payment card market, which is steadily moving away from HNW and mass-affluent clientele and opening further card types, such as metal core or metal edge, to regular customer bases.
• Malaysia-based Maybank has joined forces with Mercedes-Benz Financial to issue a dual-branded, metal credit card on the Visa payment network. Launched within Malaysia itself, Mercedes-Benz Financial has stated this particular offering is the first to be both constructed of a metal substrate and co-branded in the Malaysian automotive landscape. To further incentivize customers to sign up for the new, innovative card, users leveraging the card to make payments within any Malaysian Mercedes-Benz Autohaus will accrue additional points on select purchases, in addition to a 10% discount on Mercedes-Benz parts, official merchandise, and accessories.
• The payment and identity systems company, Inteligensa Group, launched a stainless-steel payment card in Venezuela in July 2023. Having been present for many years in the payments market and working toward the design and implementation of compelling card designs and innovations, the Inteligensa Group is seeking to offer a superior look and feel for the payment card to its HNW clients and achieve a top-of-wallet solution.

While many projects are looking to achieve different goals, whether it be to open metal payment card solutions to a wider range of customers, incentivize purchasing with value-added offerings, or achieve top-of-wallet status, the metal payment card is seen as a great way to package these benefits in an attractive and compelling way.

It is also important to consider the role of the metal payment card market as a subsegment of the overall next-generation payment card market. The metal payment card is a physical product to assist and reinforce variation within payment card issuer portfolios. When considering alternative next-generation payment card technologies, such as biometric or Dynamic Card Verification Value (DCVV) cards, these also seek to move away from being associated with the traditional payment card form factor, though they achieve this in different ways. The key difference is that issuers are not, at this point, seeking to address metal card customer bases with new offerings in the biometric or DCVV space, and are instead exploring other physical card security solutions to address tech-savvy users. At this point in the market, ABI Research does not see the metal, biometric, and DCVV payment card segments as competitive with each other.

For payment card issuers seeking to differentiate in the market, metal payment cards are an attractive proposition because they provide a clear visual and physical appeal, while also bringing fewer complications as it relates to market entrance when compared to innovations like biometrics and DCVV. Again, while these are not competitive solutions, the simplified route to market is a compelling factor in the event a traditional payment card issuer seeks to expand its card portfolio.  Indeed, metal has successfully carved out its own space in the payment cards market by offering a premium, durable, and secure option for both issuers and their customer bases, while biometric and DCVV technologies focus on advanced security offerings.