It feels like the new Apple Card received more coverage about how it looks than how it functions. Apple is just a beautiful example of a new type of credit card. Alongside the evolution of digital payments, something interesting is happening with physical credit and debit cards. From design, orientation, colors, and materials, physical cards are seeing a significant makeover.
Tearsheet's Sara Toth Stub recently wrote a story on the innovations in credit and debit cards (for Outlier members). It's not just challenger banks coming out with sleek metal cards in lots of new colors, either. Digital payment players like Venmo and PayPal have issued innovative cards. Wells Fargo and Citi are good examples of incumbents also pushing the envelope on the physical design of cards.
Subscribe: Apple Podcasts I SoundCloud I Spotify I Google Podcasts
The following excerpts were edited for clarity.
Design improvements on modern cards
It seems like more and more companies -- from fintech startups, challenger banks, PayPal and all the way to traditional banks like Wells Fargo -- are issuing credit cards with cool and innovative designs. A lot of the new cards are made out of titanium, giving them a more substantial feel. They're also coming in bright colors.
A lot of firms are changing their card orientation from horizontal to vertical because nowadays that's how most people use the card. You look at the card vertically and then slip it into an ATM machine or card reader. It's rare these days for someone to slide a card horizontally through an old fashioned credit card machine.
A lot of times the account number on the card isn't even raised -- that was a design for when old machines were used to make carbon copies of cards. A lot of firms are putting the card numbers on the back of the card. They say it's because of security but it's also a way to differentiate from other cards on the market, to look relevant and modern. There's just an immense amount of competition.
Apple Card as an example of new card design
It's Apple, so they've gotten a lot of publicity around Card. It's white and titanium and feels heavy. The account number isn't even printed on the card. Like other Apple products, Card has been received really excitedly, even if it doesn't have outstanding rewards associated with it.
Revolut recently introduced colored metal cards. Chase has made headlines with its metal cards. American Express, going back to the late nineties, had a metal credit card. These cards work really well for social media like Instagram and Facebook. They look interesting and beautiful and that's more and more important to companies' marketing. That may be another reason why firms are investing in their cards to look physically enticing.
Cards represent their holder
I spoke with Ron Shevlin, an analyst at Cornerstone Advisors. He talked about how a card can show a lot about a person's personality. He said that a card's design probably isn't enough to drive new signups, but it may inspire a consumer to use the card in a particular situation. People out with friends might pull out a colorful Venmo debit card to pay for drinks. In a more intimate situation, they could take out a card with a picture of their dog or their family. It can start a conversation.
Shevlin said card design may influence which card they pull out and that's very important to all these companies issuing cards. They want people to use their cards and there's a lot of competition around that. So, anything they can do to help a consumer choose their card is game.
Not just cool design but gains for the business
A lot of the big banks are in on this. For nearly 10 years, Wells Fargo has offered the option of a customized debit card. You can choose an image from a database of thousands of photos or upload your own. The bank said it offers this as something fun for customers. But it also said that consumers that use this type of feature are more active and have a higher customer satisfaction rating and higher retention levels. This translates into gains for their business.
Fintech for the physical world
It's very much about the physical world, which maybe we don't talk about enough in fintech. We also see companies like PayPal and Venmo promoting use of their cards. I spoke with Venmo and the company said it's always looking for opportunities for its customers to pay for more things using their Venmo card, and not just to send money to a friend or split a payment. It makes digital services applicable to a lot of life.
I'm not sure anyone really knows where this is headed. Shevlin at Cornerstone was adamant about one thing and that's that physical cards aren't going away. Even if someone has a lot of cards saved in their phones or digital wallets, they will use cards at least as a backup. Merchants have invested so much into physical card infrastructure, so they want to continue to accept them.