The Australian payment cards market is highly saturated, limiting the room for any significant growth. According to the Reserve Bank of Australia, the total balance value on credit and charge cards at the end of 2013 came to A$50.1bn ($44.5bn) a 0.4% increase of A$206m ($183m) from the previous year.
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Have the major card issuers changed market share significantly?
What are the major challenges to the established issuers in the Australian market, and how are issuers responding to these challenges?
What are the successful strategies being used to acquire and retain customers, and why are they successful?
Several factors are hampering opportunities in the Australian payment cards market. The countrys economic and housing market situation is driving consumers to be more cautious on spending. Additionally, the vast range of products and brands mean that banks are competing on price, which is a difficult strategy to maintain.
The number of credit cards in issue has been growing year on year since 2005; however, growth has been decreasing each year, and this trend is becoming more noticeable. Over the period, the number of credit cards in issue grew by just 1.8% to 20.2 million cards, with the average Australian holding 0.9 credit cards.
As growth slows, issuers have resorted to aggressive pricing to compete, with tactics such as an introductory 0% balance transfer offer extremely popular. The market has become so competitive that most issuers offer an introductory 0% interest balance transfer. Some have gone as far as packaging other additional incentives to compete in the market.