Since last year, nearly all commercial banks have issued notices about card adjustments or discontinuations of co-branded cards, citing reasons such as "changing market conditions," "business restructuring," or "license expirations," drawing sustained market attention. In April this year, major banks like Bank of China and China Merchants Bank (CM BANK) announced upgrades from dual-branded UnionPay-Visa magnetic stripe cards to chip cards, enhancing payment security and convenience. Recently, multiple banks have again halted or adjusted certain credit card products, including co-branded and themed cards.
A review of mid-year reports from several banks reveals a shared strategy: optimizing credit card portfolios and pursuing high-quality customer acquisition.
These trends signal a pivotal shift in the credit card industry. The divergence driven by the "Matthew Effect" is nearing its end, with leading institutions solidifying their market positions and accelerating their transition toward high-quality development. Top players are upgrading card functionalities and refining product systems to better meet customer needs and adapt to evolving demands.
**1. Proactive Adjustments: Phasing Out Inefficient Offerings** Co-branded cards have drawn particular attention due to frequent adjustments. Industry experts note that recent overhauls reflect a strategic shift toward refined, high-quality operations, driven by regulatory guidance, market changes, and internal business needs.
Regulators have tightened oversight of co-branded partnerships, requiring banks to rigorously assess partner qualifications and benefit fulfillment risks while optimizing consumer finance structures. Financial institutions’ proactive product optimizations align with these "prudent management" mandates.
Additionally, co-branded cards, as time-bound commercial collaborations, face constraints from contract durations and shifting business priorities. Issuance may end naturally upon agreement expiry or prematurely if either party pivots strategically.
Notably, co-branded cards incur higher issuance and maintenance costs than standard products. A city commercial bank’s retail head disclosed that licensing fees for top IPs (e.g., airlines, e-commerce) can exceed 30% of benefit costs. As market dynamics and consumer preferences evolve, some co-branded cards targeting niche scenarios struggle to sustain scale, risking profitability imbalances.
"Discontinuations are essentially proactive exits from inefficient operations," the executive emphasized. For issuers, retiring outdated products and reallocating resources to contemporary offerings is a commercially sound decision.
**2. Strategy Refinement: Prioritizing Value Creation** While discontinuations dominate headlines, many banks are simultaneously launching new co-branded cards. For instance: - **Daily Consumption**: CM BANK partnered with Starbucks last December to debut a co-branded card offering perks like reward stars and discounts for reusable cups, accessible even to non-CM BANK cardholders. - **Digital Content**: Collaborating with Bilibili Inc. (BILIBILI-W), CM BANK introduced a "Bilibili Ganbei" card, bundling annual Bilibili memberships with collectible NFT perks, resonating strongly with young users. - **Entertainment**: The refreshed Mastercard League of Legends card grants S15 esports viewing benefits and ticket raffles for the LoL World Championship. - **E-Commerce**: A Tmall Supermarket co-branded card offers rebates or vouchers for new users, enhancing online savings.
These moves underscore a strategic rebalancing—prioritizing engagement ("retention over reach") and quality over quantity.
Today’s consumers seek more than payment convenience; they crave lifestyle integration. For credit cards to thrive, issuers must amplify demand responsiveness while bolstering consumption stimulus—a key cyclical resilience lever.
**3. Boosting Consumption: Advancing High-Quality Growth** China’s 15th Five-Year Plan emphasizes high-quality development, innovation-driven growth, and meeting rising lifestyle demands—a roadmap for industries including credit cards.
Credit card issuers must sharpen their role in consumption stimulus by identifying high-frequency spending scenarios and innovating products/services to unlock domestic demand opportunities.
Leading players are doubling down on hot consumption sectors to expand domestic demand. For example, CM BANK enhanced its flagship "11.11 Bonus" campaign, offering 0% installment plans (up to 24 months) on Taobao, JD.com, and Pinduoduo, plus exclusive vouchers for select users.
Aligned with national policies, CM BANK also launched subsidy-stacking initiatives like "National Subsidy Plus," benefiting nearly 100,000 cardholders while amplifying the multiplier effect of government consumption vouchers.
However, risks persist. The rise of internet-based microloans and buy-now-pay-later products, which may exploit impulsive spending, threatens market stability if unchecked. Thus, while expanding consumption scenarios, the industry must strengthen macro-risk controls to safeguard systemic security.
As inefficiencies are purged and leaders deepen transformations, the market will stabilize. Credit cards are poised to develop enduring, high-quality resilience. "A more rational, stable, and sustainable credit card landscape is fast emerging."