Banks lag tech firms in driving credit card use

Delayed rewards and weak reminders leave cardholders disengaged.

Banks are missing opportunities to lift credit card use as slow reward delivery and poorly timed campaigns leave customers disengaged, even as technology firms raise expectations for personalised digital experiences.

“When I was part of a large global bank and we were doing credit card digitalisations, 25% to 35% of contact centre queries were, ‘Where is my benefit? Where is my offer?’” Aishwarya Jaishankar, co-founder of Hyperface Technologies Pvt. Ltd., told Asian Banking & Finance. “That’s how badly user experiences are designed.”

She said banks still lag technology companies such as Amazon.com, Inc., which track customer behaviour in real time and prompt users with reminders and incentives. Banks, by contrast, often rely on fragmented systems that delay rewards and limit visibility for cardholders.

India‑based Hyperface, which works with or is in talks with about 10 domestic banks, said lenders often deploy several tools for rewards, campaigns, and engagement but fail to create a seamless experience.

“Typically, they end up using three or four different solutions, but still not achieve a smooth user experience,” Jaishankar said in a video call.

One common friction point is the delay in crediting rewards. Granting points for hitting a spending target can take as long as 40 days, even as customers expect faster feedback on progress.

Jaishankar said cardholders respond better when they can see goals, track progress and receive reminders after transactions showing how close they are to meeting targets.

Dormancy is a bigger concern. Initial enthusiasm after card issuance often fades, leading to a drop in use. “All of us get excited with the card, but do we continue with the same card?” she asked.

Hyperface said it helps banks identify customers who have been inactive for 30 days, both overall and in specific categories such as fuel and electronics. Activity in some categories signals loyalty.

Fuel is a strong indicator, Jaishankar said. “If you’re using the card for fuel, you tend to stay.”

When usage stops in those areas, banks can intervene early. Hyperface said a partner bank that sent offers on the 31st day of inactivity raised reactivation rates for dormant customers to 40%. Restarting spending in one category often leads to wider card use, she added.

Beyond India, Jaishankar said banks are increasingly open to technology partnerships. She said Japanese lenders she met at the GFTN Japan Forum in late February are investing heavily in digital tools and customer‑focused services.

“Financial institutions are very focused on customer centricity,” she said, describing Japan as a premium market where customers expect banking products to recognise them like high‑end retailers.

Hyperface is preparing to go live with its first bank partner in Vietnam. “Expanding globally, especially in Asia-Pacific, is our biggest focus,” Jaishankar said.