The Target data breach has pushed security to the forefront in the card marketing battle for share of wallet. The breach, which occurred during November and December of 2013, directly impacted more than 110 million consumers and continues to receive high profile media coverage nearly 6 months on. Such negative exposure on the topic of payment security was the last thing the credit card industry needed in its ongoing mission to shift consumer spending onto plastic, let alone convince consumers to pay for purchases using their mobile phones.
These days, credit cards are loaded with features and benefits like never before, so when it comes to selecting key messages to lead with in an acquisition campaign, there are many to choose from. They range from the tried and true, “no annual fee” and “0% intro rate” to giving away cash, miles or free FICO scores. Security is typically not promoted as a key feature; however, card marketers who want their campaigns to resonate in a post-Target breach era should build it into their marketing messages. Consider the following developments:
1) Chip card marketing is moving beyond travel cards: Following the Target breach there was heightened interest in the progress of chip card implementation, which is scheduled for 2015. According to Mintel Comperemedia, in April of 2014, 25% of offers for new credit cards promoted a secure chip as a feature of the card, up from 13% in April of 2013. Until recently, only travel cards promoted a chip, but now cards such as the Citi ThankYou card and the AmEx Everyday Card promote the chip, suggesting that that there is a first-move advantage to promoting a feature which will soon be ubiquitous.
2) Market leaders are testing a secure message: The Discover it card is packed with features but has recently been testing the following message: “Serious about security. We monitor every purchase, every day”, on the front and/or back of its direct mail envelopes, sometimes in conjunction with the free FICO incentive and sometimes in conjunction with a cash incentive. Discover has elevated the prominence of security in its test marketing in a sign that maybe security should take the lead in the current environment.
3) Innovators see a gap in the market: A start-up called Ondot recently announced Card Control – a new technology that it will license to banks. Card Control enables consumers to disable their cards or set restrictions using their smartphones. The technnology even allows consumers to restrict card usage within a single zip code to minimize the risk of fraud. The company recently secured $18 million in venture capital funding suggesting that security is an area with plenty of opportunity for innovation.
The Target data breach had a broad and lasting impression on U.S. consumers. Card marketers can gain a competitive advantage by addressing consumer concerns and placing security at the center of their marketing messages.
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Andrew Davidson is the Senior Vice President of Mintel Comperemedia. Andrew uses his 20 years of financial services research experience to provide insights to clients around key trends and industry marketing activity, helping companies understand and react to an ever-changing competitive environment.
