Artificial intelligence has raised consumer expectations. Today, people can create a personalized event invitation, social media post, or digital experience in seconds, so why does the payment card they use every day still feel generic?
That question is driving renewed interest in payment card innovation, including personalization, premium materials, digital integration, and stronger security features which continue to influence what consumers want from the cards in their wallets.
In a recent PaymentsJournal podcast, Brent Bowen, Senior Vice President and Head of Sales for Financial Services Solutions at Giesecke+Devrient, and Brian Riley, Director of Credit and Co-Head of Payments at Javelin Strategy & Research, discussed the evolution of card design, the impact of the digital landscape, and the role technology is playing in the future of card innovation.
The overarching message: cards remain the cornerstone of financial services product lineups, but staying top of wallet is increasingly challenging.
Pushing the Unboxing Envelope
This workhorse role of payment cards has long offered a branding opportunity for banks and credit unions, as well as digital-first firms and fintechs whose card offerings may be one of their few tangible links to customers.
This opportunity is only likely to increase, as data from Nilson found that purchase volume on the leading card brands rose 6.4% last year, despite continued inflation and economic pressures.
“The card will never go away, no matter how things expand in the digital space,” Riley said. “It becomes the way that a financial institution—whether it’s a fintech, a Wall Street bank, or a Main Street bank—can present themselves to their customer. It goes in their wallet every day and it’s an important part of the relationship. When you start building the value proposition for a credit card, the card itself comes into play.”
A focus on individual lifestyles has fueled demand for special cards, although premium in cards doesn’t always mean gold-plated. A strong consumer segment is drawn to eco-conscious cards made from wood or recycled plastics. Others may prefer ceramic or similarly distinctive materials t while opening the door to more innovative designs.
The popularity of premium cards has even turned receiving them into a social media moment, with many consumers sharing the unboxing experience online.
“Many fintechs have pushed the envelope, no pun intended, with that unboxing experience, and that has created some unique opportunities to differentiate themselves from a branding perspective,” Bowen said. “These products and services reflect the consumers’ personalities and values. They want that cardholder experience to be delivered the way they want it and in the shape that they expect it to be.”
“Whether it’s maximizing reward points or travel points, whether it’s lowering fees and interest, or even security and convenience and speed—those are all things that consumers are looking for in their payment products today,” he said. “Card products help differentiate that in the marketplace.”
Digital and Physical Convergence
Although physical cards retain strong tactile appeal, delivering a robust digital experience is equally important. This is no small feat, as e-commerce, AI, and social media have raised expectations for communication and product delivery.
The convergence of physical and digital products is another key trend transforming payment cards. For example, a consumer attracted to a metal card as a status symbol also expects the convenience of loading the card into a digital wallet for e-commerce transactions. This digital optionality is critical not only for convenience, but also for driving customer engagement.
As a result, speed to market has become critical for issuers seeking a return on investment. It also aligns with another growing consumer preference: constant innovation and access to the “next big thing.” AI is helping drive these expectations by giving users immediate feedback and personalized experiences in seconds.
At the same time, the technology could prove to be a gamechanger for issuers.
“One of the big things that is coming into our market is this AI world,” Bowen said. “G+D has a AI card design tool, so you as a consumer can use this AI generation and say, ‘I want a puppy dog sitting on a beach drinking a cool drink’, or apply images that have special value for you, and it will show you your card right there.
The Influence of Security
Alongside these expectations for speed and customization comes an equally strong expectation of security. As the digital economy has expanded, so too have vulnerabilities to fraud.
These threats are accelerating the integration of advanced security standards into payment card technology. For example, the Fast IDentity Online (FIDO) standards are passkeys bound to a device to help mitigate password vulnerabilities and resist phishing attempts.
When paired with EMV (Europay, Mastercard, and Visa) standards and near-field communication (NFC) contactless payment technology, authentication can be significantly enhanced.
“That security is going to drive not necessarily the design of cards, but the way the cards are used in the marketplace,” Bowen said. “If I am a consumer of a bank or a fintech and want to make a transaction, one best way to make sure that I am talking to who I’m talking to is to verify the phone credentials.”
“If it’s a high-dollar transaction, I might want to verify the person using that phone and ask them to tap their payment device against the phone to authenticate or verify that they are who they say they are,” he said.
Biometric authentication is another major security trend. The widespread use of fingerprint and facial recognition on smartphones has prompted pilots in additional use cases, most notably payments, where the security benefits are clear.
While a growing segment of consumers is security-conscious and would welcome this added layer of protection, mass adoption of biometric cards is likely still years away.
Still, for certain segments and use cases, biometric cards could hold substantial appeal. After all, security is one of the main reasons card payments have become a dominant payment method.
“That’s what is core to the card business, the irrefutability of transactions,” Riley said. “Without that level of confidence, there would be no card business. We’ve got to be able to ascertain not only is there value associated with the open credit line, but is it the customer making the transaction or the authorized user?”
The Fight to Stay Top of Wallet
All these trends—stronger security, hyper-personalization, and the convergence of digital and physical experiences—will continue to keep payment cards in consumers’ wallets for years to come.
Even so, differentiating in a highly competitive market and staying top of wallet remains a challenge for issuers. For organizations looking to acquire customers more efficiently and drive card usage, the answers may not come easily.
One place to start is with the customer.
“It’s this granular marketing mentality of being able to hyper-personalize that card product into the consumer’s hands, so that it feels like it’s coming specifically to me, Brent Bowen, and I’m not just one of the masses,” Bowen said. “These advanced personalization strategies, in my estimation, can increase revenues 15% to 20%.”
“There’s also the ability to reduce the acquisition costs for these card programs,” He adds: “Personalization can drive that cardholder experience.”
This evolution underscores how cards have become critical ambassadors for financial services brands. More than ever, organizations now have the tools to maximize the value of these offerings.
“It’s personalization and customization of individual packaging and a marketing-to-a-segment-of-one mentality,” Bowen said. “We’re moving to a world where the consumer wants their card to be unique, instantly issued, and personalized, almost in real time.”
“AI can help drive all of those things, either in the back office or on the front end from a design perspective,” he said. “It can help provide an experience that a consumer is expecting of today’s world. Where is my card, when am I going to get it, and what’s it going to look like?”
