CB: Are the new metal cards sold by banks really useful?<

Gone are the days of elite metal cards. Born in 1999 with the launch of the Centurion from American Express, and accessible only by invitation for its wealthiest customers, the metal card was perceived 20 years ago as an extraordinary product. “His objective was to integrate the codes of luxury into the relationship with the bank - the advantages relate in particular to haute couture, gastronomy, hotels - and to offer a tailor-made product to an exclusive circle of privileged customers”, explains Tristan Briend, banking and fintech manager at the consulting firm KPMG. The operation allowed “Amex” to establish itself in the collective imagination as the bank of wealthy travelers. “It was the first bank to release a card made of something other than plastic,” agrees Julia Caron, marketing manager for innovative payment products at Thales. The company acquired Gemalto in 2019, a leading manufacturer of bank cards.

If metal is gaining momentum in France - Boursorama (Société Générale) and Aumax pour moi (Crédit Mutuel Arkéa) announced the launch of such a product at the end of the year - it's because it is part of a more global framework of product diversification. “Over the years there have been changes in the nature of the materials used. The big card manufacturers like Thales and Idemia want to make the most of this product because it's their business. Metal is ultimately a logical continuation for this object that we use 200 times a year on average”, underlines Angelo Caci, partner at the consulting firm Syrtals Cards. In October, the search engine Ecosia launched a bank card made… from cherry wood! BMCI, a subsidiary of BNP, opted in 2016 for biodegradable cards made from corn starch, already used for food packaging.

A top-of-the-range looking product billed up to 16.9 euros per month

No traditional bank has yet taken the plunge, but already seven neobanks and online banks have integrated the card metal in their catalogs. Boursorama and Aumax therefore, but also N26, Revolut, Vivid, Curve and Sogexia. And since American Express, the granting conditions have completely changed. The product still has a high-end dimension, but has become widely available. Banks aim to reach as many customers as possible with this means of payment. They have therefore decided not to establish any income condition, and above all to lower prices considerably compared to the American giant. “These cards induce little or no additional risk: metal or not, the cards offered by neobanks generally include systematic authorization and a balance check during each payment, the operation of which is equivalent to an “Electron” type card. among traditional players,” says KPMG. The product is only invoiced between 9.9 and 16.9 euros depending on the actors, but still with a beautiful varnish of prestige: “The design and the touch of the product remain very powerful” according to Angelo Caci. A very important vector of proximity, continues Julia Caron: “In a digitalized world, we see agencies disappearing and advisers becoming paying. Finally, the bank card is the last tangible link between the bank and its customer. It is therefore very important that this link be as personalized as possible, especially for neobanks that do not have branches.”

Admittedly, no public data has yet been released by the banks, but Tristan Briend of KPMG believes that this product has “contributed, on its own scale, to the strong growth in the number of accounts opened with neobanks and banks in line". Between 2017 and 2019, the number of accounts opened within neobanks increased by 150%, recalls their study. "We do not have access to detailed figures by offer, but we can assume that in addition to direct subscriptions to the metal offer, these cards are subject to upgrades by existing customers who have subscribed to a free offer in a first time”, continues the cabinet. By way of example, the American bank Chase, when it launched its card in 2016, recorded more than one million subscriptions in the United States.

Beyond the aesthetic aspect, the real advantage of these cards remains the set of services associated with them. To be very clear, Capital has thus obtained, thanks to the Panorabanques bank charges comparator, a comparative table allowing to realize the advantages of such a product. On the price side, Boursorama is once again honoring its title of “cheapest bank” by offering its Ultim Metal at 9.9 euros. Only Vivid and Sogexia align themselves with such a price. Note that Boursorama and Aumax for me are the only two establishments that allow you to benefit from a French Iban, an important detail when you know that a foreign Iban can cause a number of difficulties for customers, and in particular in their direct debit.

On European territory, three establishments authorize free and unlimited withdrawals: Boursorama, Aumax and Sogexia. It must be said that the first two can rely on the banking network, but also the financial solidity of their parent company, namely Société Générale and Crédit Mutuel Arkéa. Competitors have set a ceiling beyond which a commission of 2% or 3% is charged on each withdrawal. N26 has opted for a system introducing 8 free withdrawals per month before applying a flat fee of 2 euros.

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Outside European borders, there is consensus to allow customers to pay unlimited and free of charge. On the other hand, Revolut, Vivid and Curve have established a ceiling (between 600 and 1,000 euros) similar to that imposed within the European Union. Another point of difference: the established ceilings are particularly heterogeneous. Where Boursorama, N26 or Aumax reason per month in terms of payment, Curve has opted for a daily ceiling (2,400 euros).

Travel insurance - flight delays, lost luggage - as well as medical insurance abroad are also a common point between all the players. The difference relates to the ceilings. Once again, Boursorama and Aumax stand out again by offering support up to 2 million euros, twice as much as the competition. "Insurance is one of the major parts of these metal cards. They are part of the idea of ​​a more global package, which partly explains the cost of the card," said Olivier Nora, head of banking products at Idemia. This banking card giant supplies Boursorama, among other things, with the metal cards needed to market its Ultim Metal offer.

These advantages are not so innovative after all. Because the battle for fees abroad, particularly within online banks, has already been launched since 2019. Fortuneo had at the time launched its Fosfo offer to exempt its customers from fees for withdrawals and payments outside the Union. European. Behind, Boursorama then ING had followed. On the other hand, guarantees and assistance related to travel and health are already included in the premium cards of these same establishments. Which makes KPMG say that “by the level of insurance offered, metal cards are often equivalent to Visa Premier or Mastercard Gold”.

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The metal cards have therefore also relied on much more prestigious services, to finally place themselves between a premium card (Gold, Premier) and a very high-end card (Mastercard World Elite, Visa Infinite). Revolut, Boursorama and Curve allow metal card holders to benefit from airport lounges. A service certainly offered by traditional banks, but only by subscribing to a very expensive Mastercard World Elite (between 285 and 310 euros for most establishments) or Visa Infinite (even more expensive). “Access to airport lounges arouses the interest of customers but is not yet a market standard, and the concierge service is not offered much at neobanks”, reminds KPMG. The nature of the benefits varies by institution. N26, for example, has integrated insurance for smartphones and tablets up to 1,000 euros in the event of theft or damage, whether the purchase was made with an N26 account or not.

Going down a notch, however, we realize that premium cards sometimes provide the same advantages as metal cards. Aumax's CB Premium and metal both guarantee the return of certain products purchased during the year up to 80%. Revolut's cashback offer (the "Rewards"), initially reserved for a small part of its customers, was finally democratized by extending to its premium offer. Above all, only Vivid provides cashback on all purchases, the other banks having gone through partners. Note that the concept of cashback is not specific to neobanks. LCL has been offering them since 2015, as has Société Générale.

Duplicate with premium cards

There is therefore still a long way to go for the product to take a prominent place in France. According to a survey conducted in 2020 by Data2decisions on behalf of Idemia, 60% of 18-37 year olds worldwide said they were aware of the concept of a metal card. "But the proportion is lower on our territory, adds Olivier Nora: only 37%. There is therefore real room for maneuver for the development of the product". Although greatly reduced, aren't the price of the card and its "bling-bling" character a hindrance to its development? , the price is very advantageous”, explains Tristan Briend.

Especially since the manufacturing price of this metal object is much higher than its plastic counterpart: “You have to realize the technological jewel it represents, nuance Julia Caron. This product allows you to make contactless payments, all with metal materials that could disturb the magnetic field of the terminal. Not to mention the integrated electronic chip and microprocessor, both of which are very efficient. Everything is certified by Visa and Mastercard standards.” Traditional banks will finally have a card to play, they who have not yet really invested in this sector. With their commercial strike force as well as their customer portfolio, they could boost and take this market to a new level.