Internet giants hunt for credit cards

On social platforms, discussions like “whether credit cards ruin young people” abound. Do credit cards destroy young people? Always arguing, bankers usually laugh.

Many questions can only be laughed off. But if they realize what kind of changes the credit card market is facing, even the calm bankers may not be able to sit still. At present, a long-planned credit card hunting battle involving multiple parties has already begun!

At the end of 2019, there were approximately 350 million domestic credit card holders. During the same period, the central bank has about 550 million people with credit records, and the 200 million gap not covered by credit cards is being filled by representative consumer loan products such as Huabei, Willful Payment, and Baitiao.

Around 2015, e-commerce consumer financial products have successively launched interest-free functions to empower shopping consumption. This type of product not only allows those who can’t apply for a credit card to enjoy 30-day interest-free service, but also captures a large number of cardholders through the 6-term interest-free, 12-term interest-free, and 24-term interest-free promotion.

At that time, the Huabei and the credit card customer base complemented each other and the scenes were complementary. But like the evolutionary logic of any business story, the need for survival and development will always make the two sides meet and overlap until they meet each other.

First is the overlap of customer groups. Since 2015, bank credit cards have been expanding. In four years, the number of cards issued in use has increased from 432 million to 746 million, and the total credit payable has increased from 3 trillion yuan to 7.59 trillion yuan. The secret of big expansion lies in catching up with the traffic dividend of the Internet platform and continuously pushing the customer base to sink.

Banks seem to be unaware of the arrival of competition.

At the same time, Internet products continue to expand user boundaries upward. As early as 2016, the number of Huabei users has exceeded 100 million, among which the post-90s accounted for nearly half; by 2019, the number of users has exceeded 300 million, with the characteristics of national products, and the age structure of users has become more balanced. Ratio drops.

The customer groups of both sides are increasingly overlapping.

Then there is overlapping scenes. Previously, credit cards were a full-scene payment tool, while e-commerce installment products were limited to the e-commerce ecosystem. With the break of payment tools such as Alipay and Suning Pay, e-commerce installment products have broken through the shackles of usage scenarios.

After the guest groups overlap and the scenes overlap, the hand-to-hand war will inevitably start.

In February 2019, Alipay issued the “Announcement on Credit Card Repayment Service Rules”, imposing a handling fee on credit card repayment.

At that time, the mainstream interpretation focused on two points. In addition to the cost reduction of official announcements, the other point was to consolidate the closed loop of funds and encourage users to use money from other platforms to pay back their credit cards. Alipay’s money is still in Alipay.

In hindsight, there is another point that has been overlooked by everyone, that is, indirectly disrupting the user’s credit card payment habits.

In July 2019, the China New Economic Research Institute and Alipay released the “Post-90s Savings Report”, which mentioned an interesting data, that is, 90% of post-90s use Huabei to consume, not because they have no money, but want to use free Save money with interest period.

For example, for an order of 1,000 yuan, the funds in Yu’e Bao can afford to pay, but I choose to pay with Huabei interest-free, and repay after 30 days. During this period, the money will lie in Yu’e Bao to earn interest (assuming annualized income Rate 3%), earning 2.47 yuan interest.

2.47 yuan is a mosquito leg, but the consumption characteristics of the post-90s generation has always been “you can buy milk tea for 30 yuan, and the shipping fee of 5 yuan is firmly resisted.” Although the financial interest is low, they care about it.

Huabei’s interest-free consumption and money saving functions are also available with credit cards. However, if you also charge a credit card fee, in order to save the fee, just use flowers.

Therefore, after WeChat and Alipay charge for repayment of credit cards, the indirect effect is to induce users to reduce the use of credit cards.

Credit card repayment charges, users complained repeatedly, it seems that the payment giant has sold a flaw to the bank App, but in fact it has made a beautiful blow in reshaping the user’s “interest-free payment” habit.

This blow, seemingly weak, has far-reaching impact. Xinghuo Liaoyuan, the big scene of consumer lending giants hunting for credit cards has begun.