Australian Credit Card Industry Essay

4520 words - 18 pages

1. Introduction1.1 PurposeThe purpose of this report, first of all, is to provide brief overview of the credit card industry. After that, a company in the Australian credit card industry, VISA International, will be discussed. From all of these discussions, three issues will come up which then, finally, will lead into recommendation about what should be done by VISA to utilize those issues and gain competitive advantages in the future.1.2 BackgroundVISA International is one of the largest global credit card companies in Australia. However, recent development shows that due to the RBA reforms, VISA market share in Australia has been significantly affected and it keeps losing more and more market to its competitors. That's why, it is very interesting to discuss about this industry and see how VISA, one of the biggest Australian credit card companies, competes in this segment.1.3 ScopeAustralian credit card industry, to some extent, is a very big industry and has a lot of important aspects; therefore, it is almost impossible to analyze all those aspects in this report. Thus, in this report, all the factors that will be analyzed are only those that important and, more specifically, have strong correlation with VISA International1.4 MethodologyThe type of data that were collected for this report includes speeches made by important people, text books, journal articles, and also data/information from the internet.1.5 AssumptionIn this report, it is assumed that all the data collected were correct at the time of this report being written or at the time when the sources of the data being written.1.6 PlanThis report's plan firstly is to analyze the Australian credit card industry. Then, discuss what issues that VISA International has utilized in the past, and last, to give solid recommendation about what other issues that can be utilized by VISA International in the future to gain competitive advantages.2. Australian Credit Card Industry2.1 Brief Overview of the IndustryWith almost 15 millions credit cardholders (it is important to be noticed here that Australia population itself is only 20 millions people) and with the fact that Australia ranks as one of the region with most developed card markets, Australian credit card industry is really an attractive market for credit card companies. Big companies like VISA, MasterCard, Bankcard, American Express, and Dinners Club are the major companies in this industry, or just almost the same as the major credit card companies in world-wide, except for Bankcard which is only available for use in Australia and New Zealand (Cornell and Moullakis, 2004; Visa International, 2000).Furthermore, even with the fact that, nowadays, there are so many debit cards that more superior in terms of function and safety than credit cards, Australians have been slow to embrace them. Many experts feel that Australians are just not willing to break off their "love affair" with credit cards. Such condition has made credit card industry...

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