bankcard

Bankcard was a shared-brand credit card issued by financial institutions in Australia and New Zealand between 1974 and 2006. It was managed by the Bankcard Association of Australia, a joint venture of the Australia's largest banks, and was the nation's first mass-market credit card. Before 1974, only store cards, Diners Club and American Express were available in Australia and these were either restrictive or only accessible to the wealthy.^[1][2] In the first decade after its introduction, Bankcard dominated the Australian credit card market, with more than 5 million cardholders at its peak in 1984.^[3] As a result of a declining cardholder base, falling transaction volumes and shrinking market share in relation to internationally-accepted credit cards such as VISA and MasterCard, the card was withdrawn from use in 2006.^[3]

History

Before Bankcard, the relatively small population of Australia, coupled with its vast geographical spread made a credit card system cost prohibitive for any single Australian bank. In the early 1970s a number of banks combined to seek approval from the Reserve Bank of Australia and the Australian Federal Treasury to commence a credit card scheme in the Australian financial market.^[2] Approval was granted in 1972. The banks formed a company, Charge Card Services Limited, to manage Bankcard and process credit card transactions. Each member bank issued its own variant the Bankcard card and each established its own credit rules and maintained direct customer relations with its own cardholders. Bankcard was officially launched in October 1974 by then Prime Minister of Australia, Gough Whitlam.^[1]

A significant marketing campaign followed the card's launch. This included what was then the biggest direct mail marketing campaign in Australia to date.^[2] Among other things, banks posted a card with a $A300 credit limit to potential clients, following analysis of their accounts.^[4] Within 18 months there were more than one million cardholders, representing more than 6% of the Australian population. 1983 saw the expansion of Bankcard to New Zealand. By 1984, there were more than five million cardholders in Australia and New Zealand.

Withdrawal

At the beginning of 2006, the number of cardholders had declined to around one million. Popularity of the card had declined as other credit card options became available. Bankcard was significantly limited by its lack of acceptance outside Australia and New Zealand. It could not be used for electronic procurement on the internet and by the turn of the century was considered as outdated.^[1] Despite this, Bankcard continued to generate profits for member banks, largely due to the fact that the elderly demographic of cardholders had a low instance of default.^[5] In February 2006, however, the Bankcard Association of Australia announced that it would phase out Bankcard by the end of that year, citing the exceptional growth of credit card operations and improvements in technology allowing member banks to perform their own data capture and processing in-house.^[2] Existing cardholders were offered alternative credit cards by their issuing banks.

At the time of this announcement, the National Australia Bank remained the only bank still issuing Bankcard. The Westpac and Commonwealth banks had stopped issuing the card in June and December 2005 respectively. Merchants within Australia were able to accept Bankcards until the end of 2006. Bankcard operations were closed in New Zealand in October 2005.

See also

• Bankcard delays bring shoppers extra month, The Age, 23 December 1986. Retrieved 2009-08-19

References

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