ME Bank CEO Jamie McPhee admits that 2019 was the toughest 12 months in the banking caper since the havoc of the Global Financial Crisis a decade ago.
McPhee, now in his tenth year running the bank, revealed yesterday that he had been forced to abandon one of the main planks in his long term plan for ME: a program to deepen its presence in credit cards.
It's a big strategic retreat for ME that has largely relied on its credit card business as a customer acquisition vehicle since it acquired bank status in 2001.
Last September McPhee announced ME would roll out a rewards program and widen its credit card portfolio beyond the "Frank" discount rate product.
However, a perfect storm of events led ostensibly by the sudden rise of 'buy now pay later' disruptors such as Afterpay and Zip has left McPhee little choice but to abort the previously announced expansion.
The decision to abandon the roll out means that millions of dollars already spent on developing a new card management system are down the drain.
McPhee says abandoning the project was the right decision because the economics of the credit card business in Australia have changed.
"We came to the conclusion that there is a tectonic shift occurring in the economics of the credit card industry, with the new competition offered by buy now pay later providers," said McPhee.
"We don't think that trend is going to change because there is an attraction for consumers of having retailers bear the cost of a third party funding purchases.
"Our credit card project was quite expensive, so we stopped to take another look at the business and eventually decided that credit cards were a product set in strategic decline.
"We just could not justify continuing to increase investment in credit cards."
While there is no doubting McPhee's call that the credit card is in decline as a payment instrument, it is debatable whether its demise is mostly attributable to growth of the buy now pay later method.
Data published by the RBA shows that popularity of credit cards in Australia began tapering in 2007 - eight years before Afterpay launched its first product.
The official data indicate that the sliding market share of credit cards in the last decade has more to do with the growing consumer preference for debit cards than buy now pay later schemes.