Credit cards are for seniors: CBA steps up battle for Millennials | clancyyeates
Though CBA is plugging Klarna on its app, the Swedish company's local arm is a separate business, which is a 50:50 joint venture between CBA and Klarna.Amid debate about whether BNPL providers should be forced to check on their customers' creditworthiness, Klarna says it will conduct credit checks on all customers, though a company spokeswoman said the company won't be regulated by responsible lending laws.
Consumers still have 13.8 million credit card accounts, with annual spending of $265 billion. So credit cards aren't declining in the way that cheques are, or even cash. But for Blockley, there's "no doubt" some younger shoppers have ditched credit cards for debit cards, and that's how most shoppers end up paying their buy now, pay later accounts.
Cameron calls CBA’s move "very smart", citing research by consultancy AlphaBeta, commissioned by Afterpay, that found 41 per cent of Millennials owned a credit card compared with two thirds of older generations, a fall that Cameron says “would scare the hell out of most of the banks”. I think they’ve seen the writing on the wall when it comes to credit card usage. It’s falling off a cliff.Jefferies banking analyst Brian Johnson points out CBA’s core business is in good shape and has been growing market share lately, but says deals such as the Klarna tie-up can “supplement” the brand.
Shaw and Partners analyst Brett Le Mesurier says that as credit cards decline, and schemes such as Afterpay grow, other banks will inevitably try to mimic the success of buy now, pay later operators.
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