Table of Contents
OVERVIEW
Catalyst
Summary
EXECUTIVE SUMMARY
Assessing the attractiveness of the affluent customer segment
Defining different credit card customers and credit card products
Affluent consumers are a sizable group, and are currently well-served by card issuers
Affluent credit card customers are crucial to issuers
Fee and transaction fee income dominate affluent credit card customer revenue
Emerging countries represent the future high growth affluent markets
Profiling the affluent credit card customer
Affluent customers hold more credit cards per person than the average credit card customer
The minority of affluent customers makes up the majority of the revenue
Affluent customers are more likely to look for a new credit card than mass market consumers
Affluent cardholders behave differently from the mass market in two key ways
Sizing global premium card opportunities
Datamonitor's Premium Cards Opportunity Model sizes the target market for premium cards
Overall, 11 million affluent customers are expected to become premium card customers in the next 12 months
Emerging countries represent a high growth opportunity for premium cards
The US remains the largest addressable market for premium cards
The future of premium credit cards
The high levels of credit card penetration have caused traditional premium brands to lose their exclusivity
Card issuers and schemes continue to target affluent consumers with post-platinum brands
Unique services will provide a point of differentiation for the affluent segment
ASSESSING THE ATTRACTIVENESS OF THE AFFLUENT CUSTOMER SEGMENT
Defining different credit card customers and credit card products
This report examines both the affluent customer group and the products designed to serve it
Affluent consumers are a sizable group, and are currently well-served by card issuers
The US represents the largest market of affluent customers
Demand for credit cards is high among affluent customers
However, premium card penetration is low among affluent credit card customers in some countries
Affluent credit card customers are crucial to issuers
The average affluent credit card customer generates 35% more revenue than the average mass market customer
Fee and transaction fee income dominate affluent credit card customer revenue
Affluent customers will drive the future growth of credit cards
PROFILING THE AFFLUENT CREDIT CARD CUSTOMER
Affluent customers have access to a wide range of card products
Affluent customers hold more credit cards per person than the average credit card customer
The majority of affluent customers are active credit card users, but attachment levels vary globally
Affluent customers show strong demand for credit cards
Affluent customers are more likely to look for a new credit card than mass market consumers
Affluent customers are better informed about credit card products than the mass market
Affluent cardholders behave differently from the mass market in two key ways
Affluent customers spend 3.2 times more on their credit cards than mass market customers
Affluent customers are more open to new payment innovations than the mass market
SIZING GLOBAL PREMIUM CARD OPPORTUNITIES
Datamonitor's Premium Cards Opportunity Model sizes the target market for premium cards
The Premium Cards Opportunity Model identifies two key consumer groupings for premium cards
Emerging countries will become high growth markets for premium card issuers
Overall, 11 million affluent customers are expected to become premium card customers in the next 12 months
Emerging countries represent a high growth opportunity for premium cards
Not all card issuers benefit from upgraders
The US remains the largest addressable market for premium cards
High growth in the number of affluent customers in emerging countries will provide strong future growth
THE FUTURE OF PREMIUM CREDIT CARDS
The erosion of premium branding has not affected the targeting of affluent consumers
The high levels of credit card penetration have caused traditional premium brands to lose their exclusivity
Card issuers and schemes continue to target affluent consumers with post-platinum brands
Cards branded above platinum offer differentiation, but some are at risk of losing their exclusive status
Visa Signature and MasterCard World are aimed at offering extra services
However, the pressure to use this branding to attract customers is devaluing such offerings
Individuality is the key to targeting niche affluent segments
Card issuers with leadership in a particular area are valued highly by affluent customers
Invitation only cards provide additional exclusivity for high net worth customers
Unique services will provide a point of differentiation for the affluent segment
APPENDIX
Supplementary data
Methodology
Datamonitor's Global Credit Card Revenue Model analyzes card issuer revenue from three different sources
Primary and secondary research
Further reading
Ask the analyst
Disclaimer
List of Tables
Table: Premium brands used by the main international card schemes
Table: A comparison of the minimum requirement guideline for Visa Signature in different countries
Table: Affluent customers across different countries, 2011
Table: Credit card penetration across different countries, by segment, 2011
Table: Penetration of premium cards among affluent credit card customers, 2011
Table: Annual revenue per credit card customers across different countries ($), 2011
Table: Annual revenue per affluent credit card customers, by source of income ($), 2011
Table: Affluent credit card customers and their primacy, 2011
Table: Monthly credit card spend, by segment ($), 2011
Table: Potential upgraders and new entrants to the premium card market, by country (percentage of consumers), 2011
Table: Level of opportunity and addressable market size for new premium card customers, by country, 2011
List of Figures
Figure: Datamonitor's definition of premium products and affluent customers
Figure: Emerging countries represent high growth for the premium card market
Figure: Datamonitor's definition of premium products and affluent customers
Figure: The US is the largest market for affluent customers
Figure: Credit card penetration is higher among affluent customers than mass market customers
Figure: 60% of global affluent credit card customers have a premium credit card
Figure: High inequality of wealth distribution creates demand for exclusivity
Figure: Affluent credit card customers generate more revenue per head than the mass market
Figure: Fee-derived income accounts for the majority of revenue from affluent credit card customers
Figure: Source of income differs substantially between countries
Figure: Emerging countries are the future high growth affluent markets
Figure: Affluent customers hold more credit cards than the average customer
Figure: Affluent customers in France have the greatest attachment to a single credit card, while those in Singapore are most likely to use multiple cards
Figure: The high proportion of customers who look for new credit cards represents both an opportunity and a threat
Figure: Affluent customers are better informed about credit card products than mass market customers
Figure: Affluent customers spend 3.2 times more on their credit cards than mass market customers
Figure: Travel, food and drink, and fuel expenses are the three leading categories of credit card usage among affluent customers
Figure: One in four affluent customers have used contactless payments
Figure: Affluent customers are more open to using mobile phones for banking-related services
Figure: Affluent customers have higher levels of trust in their card issuers than the average consumer
Figure: There are two target growth areas for premium cards: affluent consumers without a premium card and those with no credit card at all
Figure: Upgraders represent the main source of growth for premium cards
Figure: Emerging countries represent high growth for the premium card market
Figure: The US has the largest addressable market for premium cards
Figure: There is a high penetration of premium-branded cards among mass market customers in many countries
Figure: Lloyd TSB and Standard Chartered in Singapore are two issuers that no longer offer gold credit cards
Figure: Examples of the extra levels of services offered to attract mass affluent customers
Figure: Metal cards help convey a special status
Figure: Datamonitor's Global Credit Card Revenue Model