By Jessica Duncan

As marketers, we recognize that there is a typical journey that a consumer goes through when deciding to make a purchase. The stages were first classified by John Dewey early in the 20th century and begin with problem recognition and end with the consumer’s post-purchase evaluation. As you would expect, one major component of this process is the act of making the purchase. Today, that once-simple step of cash or credit, now has consumers faced with more choices and considerations than ever before. Will the consumer use a credit card or a Buy Now Pay Later installment plan? Additionally, how will they pay, through a digital wallet or an alternative platform like PayPal? With an increasing number of ways in which consumers can pay, the competition in 2022 will intensify as payment providers work to influence the consumer’s decision making by showing the most value, flexibility, or ease of use. In this article, we take a look at some of the marketing trends that are expected to be leveraged in the coming year.

Adding Value Through Rewards
We anticipate rewards will continue to be a key area of emphasis and value proposition in the year ahead. In 2021 card issuers were faced with shrinking outstanding balances and growing disruption from Buy Now Pay Later (BNPL) point of sale entrants. This forced issuers to re-evaluate their products to ensure they were aligned with consumer interests. Issuers utilized their rewards programs to retain loyalty and differentiate themselves not only from other card products but also from the BNPL competitors. This translated into new earning tiers being added to existing rewards programs, heavier reliance on limited time spend bonuses, and for some the release of entirely new products.

Competiscan observed over 40 card launches in 2021. Most of which followed one of two trends, targeting a specific niche or offering a more well-rounded rewards program. Niche cards launched in 2021 included reward-earning opportunities for pet lovers, student loans, and even cryptocurrency. Additionally, issuers like Bank of America, Wells Fargo, and Citi rolled out cash-back cards that made the earning simple, personalized, or automatically adjusted based on the consumer’s top spending like Citi’s Custom Cash Card. It is likely more issuers will follow this dynamic rewards trend where the effort of selecting categories is taken off the cardholder, adding to the ease of maximizing their rewards.

BNPL providers are also moving quickly to provide customers with more value through their own rewards programs. Klarna offers their Vibe member loyalty program, and just this month Affirm launched a cashback rewards program. Customers can now earn a percentage of cash-back on select purchases made through the Affirm app when they pay for the purchase in full. With this move, Affirm is driving more engagement directly through their app and addressing the needs of both benefits and payment flexibility.

Increased Flexibility and Control
Continued product expansion will continue in the coming year as card issuers consider launching their own installment plan option and BNPL providers set their sights on moving deeper into financial services. This will set the stage for more cross-over between the two and heightened competition. The underpinning behind these strategic moves will be centered around giving customers more purchasing power, achieved by offering increased flexibility or added control in managing their funds. Flexibility is a broad topic that can span many forms by which payment providers can promote new value. We saw the surge of contactless card issuance at the onset of the pandemic, and while contactless remains a common marketing callout, flexibility has further evolved to include broadened redemption options and alternative utilization. American Express exhibits best-in-class marketing by continually drawing attention to the choices and benefits that come with their products and membership. In a recent loyalty campaign, they featured an array of benefits that spanned value-added perks like Dine with Amex & Resy and account management flexibility like their Plan It installment program and their Send & Split P2P offering.

Creating Buzz Through Pre-Launch Marketing
In conjunction with new product rollouts, Competiscan expects to see more use of pre-launch campaigns. FinTechs have shown their skill at making something old feel new again particularly with marketing tactics like bringing back waitlists and sweepstakes. We saw several FinTechs start their pre-launch efforts and waitlist campaigns months in advance of the product release, leaning on their existing customer base and referrals to increase excitement and awareness of the product before it was available. Chase recently took the concept to the next level with the launch of the Aeroplan Card and included a bonus incentive to those who signed up on the waitlist and then subsequently were approved for the card after its release. Currently, Affirm is using a pre-launch marketing strategy through email and social media to promote the release of the Debit+ card. In addition to a “Coming Soon’ teaser campaign, they have enlisted 500,000 customers to gain early access as beta users of the product and provide insight on their experience. Their efforts have now moved on to promote joining the waitlist.

The Power of Influence
Sponsored marketing through social media has become a booming industry which is now heavily relied upon by organizations to promote their goods and services. This marketing channel resonates strongly with the Millennial and Gen-Z audiences who tend to make decisions based on peer or celebrity input and by what others are doing or suggesting. We anticipate BNPL providers will continue to invest in this strategy, and it is possible traditional payment providers will increase their presence in this space in 2022 in order to stay relevant with younger buyers. Take a look at two examples of how BNPL providers are using the power of influence through social media to attract both new customers and new business partnerships.

In closing, the stakes are high for payment providers to capture their share of consumer spend and we do not anticipate credit card issuers and BNPL providers to let off the gas in 2022. Therefore, it is quite possible the strategic efforts and amped up marketing in the coming year could make the consideration process for how to pay even more complex for consumers. However, the rise in competition will also expand the choices and conveniences, presenting options that may better fit the needs of a broader range of buyers and their shifting preferences over time.

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