With over 113 million people expected to enter the consumer class by 2024 the awareness of customer service has also evolved, emphasising the importance of delivering an elevated and distinctive payment experience.
In detail, the size of the global middle class is expected to reach 5,3 billion people by 2030 (4 billion in 2017), where Millennials and Gen Z hold an important place by stimulating demand for new technologies and unique payment products such as metal cards. In this shift, growth by volume no longer became the sole propeller for expansion. It prompted numerous brands to focus on personalising their offerings to cater to customers' desire for products that align with their values and identity. Recognised as a high-end payment product, metal cards can be uniquely personalised for individuals, crafting a distinct payment experience.
Today’s consumers are looking for products and services that reflect not only their values, but also their aspirations. While the middle class is expected to reach half of the world’s global population by 2030, consumers of numerous market segments are willing to differentiate themselves and elevate their status. This can be observed in many industries – food and beverages, automobile, beauty, etc. Despite the cost-of-living crisis caused by inflation, many brands report an increased interest in their value products and the premium product market is expected to continue growing.
Social media platforms, such as TikTok and Instagram, also play a significant role in social construction and perception. The rise of real-time interactions between consumer communities and influencers, modern homeshopping live streaming and the broadcast of a perceived high-valued, s successful lifestyles affect consumers’ purchasing decisions.
In this paradigm, Millennials and Gen Z represent a driving force in the premium market. In a study published by BCG and the Altagamma Foundation , Millennials and Gen Z accounted for approximately EUR 210 billion, twice the size observed in 2016 and expected to double by 2026. Focusing on the banking industry, payment cards have become an accessory, a medium that reflects the personality of its user and matches multiple lifestyle aspirations. By its design and composition, a metal card, with a unique, elegant, and an undoubtedly remarkable look, would be considered a premium way to pay.
A recent study published by Dentsu has shown an upswing in interest among Gen Z and Millennials for metal cards, which they classify as their preferred method of payment. This trend has spiked to 80% in 2022. In the US, one of the most advanced markets for metal card awareness, 24% of Millennials perceive credit cards as a status symbol, and 77% of the segment said they would rather have a metal card.
Key motivators when choosing a metal card are durability, looks, and perceived status. According to these criteria, Millennials and Gen Z are followed by high-income consumers, who are naturally inclined to pay a certain amount of money for a product that matches their purchasing habits. The Dentsu study also highlights that:
In the age of digitalisation and the diversification of service offerings within the banking industry, metal cards play a significant role in enhancing the brand positioning, customer segmentation, and ultimately, attracting and retaining customer loyalty for traditional banks, neo-banks, fintechs, and other financial institutions.
Employing a dual approach for card issuers, is crucial for tackling challenges and meeting customer demands in the medium and long term. Gen Z and Millennials, soon to dominate global spending, will become pivotal members of the future affluent market. Therefore, card issuers should invest in fostering loyalty among these demographics while simultaneously enhancing current services to retain high-net-worth customers. A comprehensive approach centred around customer-centricity is essential for establishing strong future consumer engagement.
Megan Heinze is President of IDEMIA’s Payment Services Business Unit. Leveraging her experience in banking, technology and payments, Megan is responsible for growing IDEMIA’s business within the Payment Ecosystem and Financial Institutions. As President, she manages the P&L and directs the identification and implementation of projects that deliver innovation, efficiency, and profit. Since she joined IDEMIA in 2017, Megan has been championing the transition from the physical world of payment cards and identification to the digital world, which includes the use of biometrics for payments, physical and logical access control, digital payment provisioning, digital identity and tokenization.
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