Major banks losing credit card customers to Latitude and Citi

Banks and other APRA-regulated institutions are continuing to lose ground in the credit and charge card markets as non-banks intensify marketing and promotion of their card offerings.

An analysis of RBA retail card spending data by MWE Consulting shows that the market share of banks and credit unions fell to 78.1 per cent from 80.4 per cent in the 12 months to the end of September.

MWE managing director Mike Ebstein said the big winners in the credit card market in the last 24 months were Latitude Financial and Citi.

"Latitude and a collection of small issuers are eroding the position of the major banks in terms of their overall share of consumer credit card balances," he said.

"It's a trend that has been occurring for several years."

All four major banks ceded market share in the two years to the end of September, with ANZ haemorrhaging the most.

ANZ's share of consumer credit card balances has slumped to 14.4 per cent since September 2016 when it accounted for 15.6 per cent of the market.

While CBA remains the largest player in the consumer credit card market, accounting for 21.2 per cent of card balances, the decline in its business accelerated in the last year. CBA was sitting on a market share of 21.8 per cent a year ago.

The narrative is similar at Westpac and NAB, with each suffering sharp falls in the last 12 months.

NAB now musters only 10.6 per cent of the consumer market.

Citi was the only APRA-regulated card issuer to grow market share since 2016. In September 2016, Citi was nesting on 7.7 per cent of Australian consumer balances, but it now holds 9.2 per cent.

If the current growth trends persist, Citi is destined to overtake NAB as the country's fourth largest retail credit card business some time in 2020.

No other APRA-regulated institution has been able to grow market share since 2016.
However, Bendigo Bank(0.6 per cent), Macquarie (1.2 per cent) and ME Bank(0.3 per cent) have each managed to hold their position.

The MWE analysis shows that credit card spending is in strategic decline as Australian consumers increasingly use debit cards to settle purchases.