Datamonitor’s “Key Trends for Australian Credit Card Customers 2011” is now available at ReportsnReports.com.

1. Key Trends for Australian Credit Card Customers 2011
Introduction
Traditional payment methods, which include cash and cheque, have experienced a steady decline over
the years for a simple reason: Australians are moving toward cards as their main way to pay.
Understanding the latest needs of Australian credit card customers is becoming more relavent for card
issuers due to the increasing pressure on both demand and competition in this sector.
Features and benefits
 Use these insights into the behaviour of Australian credit card customer Market across four product
lifecycles to shape your acquisition strategy.
 Identify new opportunities by uncovering different consumer attitudes toward credit cards across
different consumer profiles.
 Achieve a high customer retention rate by understanding key switching factors for credit card
consumers.
 Formulate strategies to attract specific consumer segments by uncovering the opportunities
available across different consumer profiles.
Highlights
The Australian credit card market is moving into a "customers buying" stage from a "providers selling"
one. More than ever, Australian consumers are actively engaged with the research process when they
are in the market for a new credit card. Indeed, four out of five new credit card customers in the last
12 months researched their product options.
Australian consumers have also become increasingly aware of new ways to pay, such as contactless
payments. The number of contactless payment users has doubled in the last 12 months – a significant
milestone for both the industry and Australian customers – but there remain barriers from both the
infrastructure and consumer perspectives.
Card issuers need to consider some premium card features to provide additional value for consumers,
as an incentive for them to weight some benefits against the additional extra costs that may be
incurred from credit card transactions, such as a surcharge fee.
Table Of Contents
OVERVIEW
Catalyst
Summary

2. EXECUTIVE SUMMARY
Understanding Australian credit card customers
The use of cash among Australian consumers is declining across all merchant segments
Datamonitor profiles the credit card customer at two levels: usage and acquisition
Australian credit card customers are mainly moderate transactors
Evaluating the first phase of the consumer lifecycle: research
The behavior shift: Australian consumers are researching their new card options more actively than
before
The loyalty shift: Australian credit card consumers are looking beyond their bank
This is a "consumers find product information" era rather than an "FS providers feed the information"
one
Evaluating the second phase of the consumer lifecycle: apply
The channel shift: the inevitable shift toward online
Evaluating the third phase of the consumer lifecycle: use
Credit cards show consistent usage across different spending categories
Trust and price are key to increasing the adoption of contactless payments
Evaluating the fourth phase of the consumer lifecycle: switch
Switching customers: price factors remain the drivers to switching
Service is the number one factor in customer retention, not price
Switchers represent a bigger business case than new entrants, but with an extra challenge
INTRODUCTION TO THE AUSTRALIAN CREDIT CARD CUSTOMER
The use of cash as the primary payment tool is declining
Credit and charge cards overtook cash as Australian consumers' primary payment tool in 2011
Datamonitor profiles credit card customers at two levels: usage and acquisition
The first customer level examined is based on how consumers use their cards
The second distinction is between those who are new to credit cards and those who are switching
Debt, fraud, and fees: three issues to win those consumers without a credit card
Mapping Australian credit card customers
Australian credit card customers are mainly moderate transactors
Consumer insight: the four stages of the product lifecycle
EVALUATING THE FIRST PHASE OF THE CONSUMER LIFECYCLE: RESEARCH
The behavior shift: Australian consumers are more actively researching their new card options than
before
Four out of five new credit card customers in the last 12 months researched their product options
Sources of information: digital channels dominate growth, but face-to-face is still dominant
The loyalty shift: Australian credit card consumers are looking beyond their bank
Interest rates and fees are becoming important factors in product choice
The role of price comparison sites should not be ignored
This is a "consumers find product information" era rather than "FS providers feed the information" one
New credit card customers pay more attention to online PCSs than direct mail marketing
EVALUATING THE SECOND PHASE OF THE CONSUMER LIFECYCLE: APPLY
The channel shift: the inevitable shift toward online
New credit card customers choose the Internet as their preferred application channel

3. However, contrary to this, most people still applied for a new credit card in branch
Adding a personal touch to the online application process would address some major issues
Consumers need assurances when using the online channel
NAB's balance transfer calculator: do not assume consumers know their products
EVALUATING THE THIRD PHASE OF THE CONSUMER LIFECYCLE: USE
Credit cards are the dominant card product among Australian customers
The majority of Australians hold more than one type of payment card
Australians put a higher priority on credit cards than other cards
Trust and price are key to increasing the adoption of contactless payments
The number of contactless payment users has doubled in the last 12 months
Generational change will continue to drive the future adoption of contactless payments
Credit card surcharges are a diversion toward other payment options
Dual cards only target a small segment of Australian consumers
The benefits of a dual card feature are still questioned by some customers
Rewards have fueled the shift toward American Express cards
Customers aged 25–34 are the prime target for dual cards
EVALUATING THE FOURTH PHASE OF THE CONSUMER LIFECYCLE: SWITCH
Switching customers: price factors remain the main drivers to switching
The credit card switching rate has increased in the last 12 months
Frequent card users are more likely to switch than others
Service is the number one factor in terms of customer retention, not price
Service is an important retention factor for card issuers
Targeting Australian credit card customers: listening to what consumers want
Switchers represent a bigger business case than new entrants, but with an extra challenge
Market gap analysis: what consumers have is not necessarily what consumers want
APPENDIX
Supplementary data
Methodology
Further reading
Ask the analyst
Disclaimer
LIST OF TABLES
Table: The primary payment option for Australian consumers, 2009–11
Table: Proportion of credit card customers by profile and the length of time with their main credit card
provider
Table: Which of the following payment methods do you most commonly use for each of these
product/service categories?
Table: Australian consumers' attitudes toward contactless payments, 2010–11
Table: What consumers have versus what consumers want – revolvers
Table: What consumers have versus what consumers want – moderate transactors
Table: What consumers have versus what consumers want – high transactors

4. LIST OF FIGURES
Figure: Australian credit card customers map
Figure: Credit cards are used across a wide range of spending categories
Figure: Credit and charge cards overtook cash as the primary payment tool for Australian consumers in
2011
Figure: The use of cash among Australian consumers is declining across all merchant segments (2009–
11)
Figure: Datamonitor credit card profiles
Figure: First-time credit card customers dominated credit card acquisitions in the last 12 months
Figure: Debt avoidance is one of the main factors for not having a credit card
Figure: Australian credit card customers map
Figure: The four stages of the product lifecycle
Figure: Digital channels dominate growth, but face-to-face still dominant
Figure: The usage of branch staff as a source of information for new credit cards is declining
Figure: Most forms of digital content have grown significantly as a source of information
Figure: More people are looking beyond their existing bank for a new credit card
Figure: Annual fees and interest rates are currently the most important product features for
consumers
Figure: Depending on how they plan to use it, consumers have different requirements for their next
credit card
Figure: Online PCSs play a greater role than direct mail marketing
Figure: The Internet is the preferred application channel for new credit card customers
Figure: There remain big gaps between how consumers apply for their cards and how they would like
to apply for them, potentially costing some issuers a lot of business
Figure: The inability to discuss product options is the biggest barrier to consumers applying for
products through the online channel
Figure: NAB's balance transfer calculator provides simple but insightful information for potential
customers
Figure: The majority of Australians hold more than one type of payment card
Figure: Credit card is the main card payment method among Australian consumers
Figure: Credit cards are used across a wide range of spending categories
Figure: In 2011, 9.1% of cardholders use contactless cards
Figure: The adoption of new technologies has a strong correlation to the adoption of contactless
payments
Figure: A growing proportion of consumers are resistant to the idea of getting a contactless card
Figure: Age has a positive correlation with the use of cash for payments below $10
Figure: Most consumers look for alternative payment options when there is a surcharge
Figure: Those customers who transact heavily are the most open to paying credit card surcharges
Figure: While the majority of consumers who are aware that they have a dual card make use of it, a
high proportion still do not use both cards
Figure: High transactors are most likely to use a dual card product
Figure: Credit card customers are less likely to leave their main credit card providers than transaction
and savings account
Figure: Moderate and high transactors are the groups most likely to switch to a new credit card
Figure: Good customer service and low annual fees are key to customer retention
Figure: A large proportion of new entrants are low transactors

5. Figure: Card costs drive product selection for revolvers
Figure: Moderate transactors see free insurance as an important feature for their new credit card
Figure: There is a strong demand for cash back program among high transactors
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