Kogan has announced plans to further expand its growing suite of retail services by adding a credit card to the mix.
In an ASX announcement on Monday morning, the online marketplace and retail service provider said it has partnered with Citi to launch a Kogan Money Credit Card. The e-tailer, which already offers a number of financial services, including Kogan Money and Kogan Insurance, is looking to diversify its service offerings by leveraging the digital efficiencies of its current suite of products, while also offering more convenience to its customers.
“Kogan.com is proud to be partnering with Citi to deliver Aussie consumers a Kogan Money Credit Card, which will provide outstanding value when shopping with Kogan.com and elsewhere,” Shafer said in the ASX statement. “We chose to partner with Citi because of their forward thinking and ability to leverage digital efficiency to deliver compelling value to Kogan customers. This partnership will be a clear-win for our customers and Citi customers,” he continued.
The company says its credit card will be “competitively priced”, and will offer “compelling loyalty incentives” for customers regardless of where they shop, however, no details surrounding what these incentives might be have been released.
Kogan.com will reportedly be responsible for marketing and distributing the Kogan Money Credit Cards and managing loyalty fulfilment, while Citi will issue the card, provide the system infrastructure, handle back-office processing, and regulatory and compliance oversight, while also establishing a relevant branded digital platform.
The company’s decision to offer customers its own credit card is an interesting one, given the rise in popularity of buy now, pay later solutions in the Australian industry. According to recent research by Australia Post and Pacific Consulting Group, 51 percent of Aussie retailers currently offer Afterpay as a payment solution across online and offline channels, with 2.3 million shoppers shopping from more than 17,000 merchants.
Despite the Senate’s pending inquiry into the fintech industry, Afterpay, and similar alternative payment solution businesses seem to be thriving, as shoppers, particularlymillennialss, embrace buy now, pay later as a viable alternative to credit cards.
Marketplaces, however, are yet to adopt alternative payment solutions, likely due to the difficulties surrounding implementing solutions like Afterpay on a platform that offers products from thousands of different sellers.
Kogan is also late to the credit card party, with struggling department stores like Myer and David Jones having offered similar credit card programs for some time, as well as supermarket chain’s Coles and Woolworths.
Kogan, however, could be looking to replicate Amazon’s credit card program in the US, where shoppers pay no annual fee for the card if they’re an Amazon Prime member and earn cash back rewards and get special discounts when they use the card to purchase products via the marketplace.
Further information surrounding Kogan’s credit card and its features will reportedly be released in 2019 when the card is made available to consumers.