Intermission: Aus fintech/neobanks are taking us for a ride
A between-seasons op ed
Hello! The usual Mehdeeka is still on break, but I have had an op-ed I wrote and never pitched anywhere sitting in my Google Docs ever since the fintech marketing series (part one, two, three, four) and the recent announcements of the Afterpay $39B acquisition and now Up Bank being acquired by Bendigo Bank have prompted me to post it here!
Enjoy, and if you too have thoughts you want to share, definitely leave a comment or like this issue.
Whether it’s conscious or not, each of us performatively display our memberships and associations through our actions, fashion, and consumerism. From the suffragettes wearing white, to year 12 jerseys, owning the full suite of Apple products, and even more recently the “I’m vaccinated” stories on social media, there’s always some association that every one of us is proud to display.
But there’s a difference in the performances between a welcoming group and an exclusive, perhaps even invite-only, membership. Certain markers create a fine, inferred line between “I’m on the outside” or “I’m in the majority” and “I’m on the inside” and “I’m in the elite”.
Colourful neobank debit cards attempt to blur that line, available to all but holding an artificial exclusivity value to anyone who owns one.
Their origin lies in the American Express Centurion card, better known as the Amex Black card. The Amex Black card originally started as a rumour in 1999. Doug Smith, a director of American Express Europe confirmed to snopes.com that after hearing the whispers of a super-secret, invite-only exclusive card, they decided to capitalise on it and actually make the card. Details on how to get a card and what benefits it comes with continue to be elusive to nail down, but the reputation of the card itself — and therefore what it says about anyone who owns one — is ubiquitous.
Between the 1999 black card and today, there were plenty of changes in card design, yet none of them quite captured the performative nature of owning a neobank card. ANZ offers a custom design service, ING have their Orange Everyday card, and luxury titanium credit cards are offered by several banks.
So how did neobank cards become so hot?
Up Bank, founded in 2018, is Australia’s current leading neobank. In a 2019 blog post, they detailed their vision for how they saw their bright orange debit card as a channel for customer acquisition.
They admitted it was inspired by overseas neobanks, writing “What we'd seen with digital banks overseas was that in this social media age, people love sharing great design. This is a very underrated marketing tactic that scales incredibly and has social proof baked in.” By 2018, the trend of ‘unboxing’ - the act of documenting the opening of a product on social media - was already well established, and they capitalised on this trend with their carefully designed welcome packs.
Since Up’s birth in the Australian market, more banks and cards have entered the ring. In Facebook groups like She’s On The Money, almost 170 thousand millennial and Gen Z women discuss their personal finances and questions such as ‘which bank should I join’. Neobanks are a popular topic.
When asked ‘why did you pick the bank you did’, you can expect to hear ‘ the card is pretty, lol’.
Up Bank uses the slogan “easy money” to appeal to and attract customers. They’re far from the only bank to be using card design and polished app UI to do so.
In a previous issue of Mehdeeka, former neobank marketer Stacy Goh detailed her experiments with messaging for the now closed Wildcard. She said “each of my later ads told a story about where the reader is now (eating cereal for dinner), and where they could be with Wildcard (having money leftover at the end of their pay cycle) … Our most successful image was a photo of our card tapping a Square terminal that we took on an iPhone … I don't think I made a single ad that mentioned interest rates, fees, or Apple Pay.”
Using card design as the hook in neobank advertisements has become the norm. In fact, a quick search surfaces digital ads where the call to action quite simply says choose your card.
An ad for Point Card, placed in the Thingtesting newsletter
Revolut (founded 2015), has built their cards into an entirely new revenue stream. They even have a dedicated subreddit, r/revolut, where users track new and limited edition cards, like a glow in the dark variation.
These communities, and the physical, flashy nature of the cards themselves, indicate that there’s a membership and a performance in play. But what exactly do neobank customers belong to?
In the instance of the Amex black card, the membership was clear — the financially elite.
Neobanks are a trickier situation. They emulate the exclusivity of the black card, especially when they’re still new and the first customers to share their account status have the advantage of having something new (which is a form of scarcity and therefore elite). That quickly wears off when hundreds of thousands of people have an account, if not several accounts with several banks.
The product category relationship between the black card and the colourful neobank cards creates a level of aspiration. Up Bank revealed their customer base to be 44% Gen Z and 42% millennial. With 90% of millennials concerned about their ability to enter the property market, the appeal of a product that mimics the financially elite becomes enormous.
Performing membership with an organisation such as Up Bank then becomes about signalling an upward mobility in social class. Customers are better at saving and therefore afford more luxuries and move from financially-anxious, lower-middle class to disposable-income, higher-middle class.
There’s only a performance when there’s an audience. With each neobank carefully selecting an easily identifiable colour, consumers are able to almost ‘pick a team’ and then identify ‘teammates’ when they see another consumer with the same card. Whether that’s in a store with a physical card, or by being active in online communities such as r/revolut and She’s on the Money.
This echochamber of customers in online spaces keeps them engaged with the neobank’s services and therefore loyal customers.
There are still questions left unanswered. What will happen to virtue-signalling cards when they compete not against each other, but against Gpay and Apple Pay? Why pull out your wallet and reach for a card when your phone is already in hand?
What will happen when these exclusive memberships saturate the market? When everyone has a card but many of them still struggle with financial anxiety, will the aspirational dream start to fade away?
Cheers for sticking with me through something different for Mehdeeka. I’d be super interested to hear your thoughts on the issue, so please do leave a comment!