Wednesday, 12 Jun 2024

Achieving Top Of Digital Wallet

top of wallet

Despite substantial investments in driving top-of-wallet behavior, credit card issuers are facing challenges in obtaining attractive returns. They are offering richer incentives to acquire new customers and increasing the value of rewards programs to retain and engage their current customer base. However, these efforts are not yielding the desired results. According to our analysis of a proprietary dataset of over 4,000 active credit cardholders, only 50% of credit card customers consistently use the same primary card over a two-year period. Interestingly, customers who switch primary cards generate nearly twice as much net revenue per card through higher spending and revolving credit. The availability of credit and the allure of rich rewards are key drivers behind the switch. In the short term, the lack of customer loyalty benefits issuers who are willing to pay a premium to drive top-line growth.

Looking ahead, the rise of digital payments has the potential to reshape the credit card market, resulting in a shift from card-based competition to transaction-based competition. Imagine a scenario where an app recommends or automatically selects the best card to use for a specific merchant while the cardholder is at the point of sale. In this new phase, being top of wallet takes on a whole new meaning. The switching behavior will intensify, and issuers run the risk of being cherry-picked for the most valuable yet expensive benefits they provide.

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So how can issuers prepare for this next phase? We believe that they need to fundamentally rethink the product construct, with personalization at its core. If customers are making transaction-level decisions, the value proposition must also be delivered at the transaction level and in real-time. This includes features like additional credit lines, promotional APRs, bonus rewards, and even product warranties offered at the point of purchase, depending on the customer’s propensity to take up a specific offer. To achieve this, issuers must understand what customers truly care about and how they prioritize different features, centered around personalized experiences. It also requires strategic thinking and tradeoffs in terms of being a card/payment account in a third-party’s digital wallet versus owning the wallet and controlling the checkout experience. Being top of a consumer’s wallet will remain the ultimate goal for credit card issuers, but the definition of what it means and how to achieve it will undergo fundamental changes.

Frequently Asked Questions

Q: What is the current state of customer loyalty among credit card users?

A: According to our analysis, only 50% of credit card customers consistently use the same primary card over a two-year period, indicating a lack of customer loyalty.

Q: What factors drive customers to switch primary cards?

A: Customers who switch primary cards are motivated by the availability of credit and the appeal of richer rewards offered by alternative cards.

Q: How can credit card issuers adapt to the rise of digital payments?

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A: Credit card issuers need to focus on personalization and deliver value propositions at the transaction level and in real-time. This includes offering tailored features and benefits at the point of purchase, based on each customer’s preferences and needs.


The credit card industry is undergoing significant changes as digital payments gain traction. To achieve top-of-wallet status in this new landscape, issuers must embrace personalization, understanding what customers value and delivering it in a way that resonates with their preferences. By rethinking the product construct and making strategic tradeoffs, issuers can position themselves for success in the transaction-based competition of the future.

For more information and updates on the latest trends in technology, visit Eireview.