Bankcard, Australia’s first credit card, will be phased out this year after struggling to fend off the marketing might of international credit players Visa and MasterCard.
According to the Bankcard Association of Australia (BAA), the decision to withdraw the card was a result of an “ever-declining cardholder base, falling transaction volumes and shrinking market share”.
Bankcard was launched in Australia 32 years ago and its axing also comes amid a credit card war waged by non-banking institutions that are offering low and zero interest rates to appeal to consumers’ burgeoning love affair with the plastic.
According to BAA spokesperson Garry Moffat, as an Australian-only credit card, Bankcard was no longer attractive in the current climate.
“Bankcard introduced credit cards to Australia more than three decades ago and started Australia’s journey down the path to becoming a cashless society,” Moffatt said.
“However, Bankcard is no longer seen as attractive by today’s market that seeks internationally accepted credit cards and other features and benefits that Bankcard is unable to match. The Australian credit card market is far more sophisticated than it was in 1974 and Bankcard has, over time, lost its appeal.”
The Bankcard scheme’s member banks (including ANZ, Commonwealth Bank, NAB, Westpac, BankWest and St George) will be phasing out their Bankcard credit cards from this month and will offer current holders alternative credit cards.
BAA said the cards would continue to be accepted by retailers until end 2006 to minimise inconvenience and ensure a smooth transition.
At its peak in 1984 Bankcard had a strong cardholder base of more than 5 million. This was gradually eroded as the banks introduced Visa and MasterCard credit cards that same year.
In B&T this week we look at the plastic fantastic marketing war between banks and non-banking institutions and why media spend in the credit card category has trebled in the last five years.
For the full story, see B&T out this Friday February 3.
Bankcard milestones:
* The Bankcard credit card scheme was launched by a joint venture formed by nine Australian banks in Sydney and Melbourne in October 1974. It was Australia’s first bank issued credit card and was said to have revolutionised retailing in Australia by reducing cash handling costs and increasing turnover.
* Bankcard expanded into New Zealand in 1983, and introduced credit cards into that market for the first time.
* At its peak in 1984, after ten years of operation, Bankcard had over five million cards on issue and dominated the credit card market in Australia. However, Bankcard member banks also launched their Visa and MasterCard products that year.
* When the Bankcard scheme celebrated its 20th anniversary in 1994, its cardholder base had dropped to 3.8 million cards.
* In October 2005 the Bankcard scheme’s operations in New Zealand were closed.
* Bankcard announces closure of scheme in February 2006. Cards will be phased out over the course of 2006.
