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Barclaycard Ring MasterCard Sets Its Features Through Crowdsourcing

This article was written by in Credit. 8 comments.


Barclaycard, a credit card issuer that primarily furnishes branded credit cards, like the Best Western Credit Card and the Carnival Credit Card, is experimenting with a new business model with a brand new card called Barclaycard Ring. I have to wonder if the “Ring” in the name of the credit card refers to a circus, because this may be the atmosphere Barclaycard is trying to create.

The Barclaycard Ring card is the first “social” credit card; the terms will be shaped by the community of credit cardholders. For almost nine years I’ve been sharing my financial reports each month and accepting feedback about and suggestions for my financial decisions from a community of readers, and Barclaycard is taking the same approach. Cardholders will be able to view the card’s profit and loss statements, offer suggestions to direct the future of the business, and share in the card’s profits.

CrowdCustomers will be encouraged to participate in the community, likely to take the form of a forum-based website, and with this participation, they’ll have the opportunity to take home part of the profits in the form of rewards. Through the openness of the business, customers will see the effect these decisions have on the card’s bottom line. By crowdsourcing some of the terms most relevant to generating profit, the community will decide which features the card may include. Here are a few aspects of the credit card offer customers will be able to affect:

  • Interest rates (currently 8% APR)
  • Balance transfer fees (currently $0)
  • Annual membership fee (currently $0)
  • Late fee (currently up to $25 – varies by state)
  • Foreign transaction fee (currently 1%)
  • Whether to outsource customer service
  • Specific deals with merchants
  • Marketing ideas
  • Web site features

Unlike most businesses, where customers feel they are better served when a company’s profits are narrow, this clever idea changes the perspective of customers. By giving the customers a role in designing the card, the community will have a feeling of ownership and responsibility. With this feeling, in addition to the possibility of sharing in the profits, customers who normally feel they are living in opposition to their credit card issuers will feel that they and Barclaycard are on the same team.

Barclaycard will share its profits with the community through a program the company is calling GiveBack. While shareholders are always the first priority, a standard calculation will determine how community participants share in the profits. While some portions of the Giveback program seem to be exempt from shaping by the community, users will have the option o directing some of this Giveback money to charities.

By giving cardholders the ability to share in the profits — more like a credit union than a typical financial institution — it’s easy to see why the low interest rates and low fees Barclaycard Ring currently offers might not be permanent. When revenue data are kept private and profit is only reinvested withing the company and distributed to its shareholders, card users benefit the most with low rates and low fees. Once customers see how higher rates and fees might benefit each individual or a community consisting of responsible credit card users who can avoid fees and interest rates by paying on time and in full, I don’t expect it to be long before the crowd votes to increase fees and rates.

Customers who participate in the community will begin thinking more like business owners than like consumers, eager to see profits climb, with the opportunity to boost their own bank account balance through the GiveBack rewards.

Photo: Photos By Mavis
Barclaycard Ring

Important Note! The information in this article is believed to be accurate as of the date it was written. Please keep in mind that credit card offers change frequently. Therefore, we cannot guarantee the accuracy of the information in this article. Please verify all terms and conditions of any credit card prior to applying.

Updated August 17, 2013 and originally published March 13, 2012. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 8 comments… read them below or add one }

avatar Kyle

I think this is a brilliant idea. Whether or not it will work, I don’t know. I’ll be interested to see how customers trade off immediate benefits (low interest rate/late fees/etc) with long-term benefits such as the GiveBack payments. I wonder what percentage of profits the company will decide to give back. It would have to be pretty significant to entice most customers to vote for higher fees. Then again, users like me who never carry a balance or pay late might get a free ride compared to the other cash-back rewards cards out there.

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avatar Luke Landes ♦127,475 (Platinum)

I expect that the most engaged members of the community would be people who don’t pay late fees or interest, as they pay their bills in full every month, and these people probably wouldn’t have a problem with raising profits by increasing fees… as they expect to avoid them. That is, “punish everyone but me.” If nothing else, it’s an interesting social experiment on the behavior of crowds.

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avatar Jeff

I don’t see this becoming a huge thing, but I’d love to see the “social” element go out of control. For example, what if high late fees will create more profit and allow for a 1/4% rate drop. I’d vote for that.

Nevertheless, while this could be interesting, I doubt it will prove to be anything more but a failed experiment.

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avatar krantcents

Normally, I would not want to share information, but they are making it attractive. The 8% interest rate is low too. Time will tell, if this a workable model for others.

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avatar Ceecee ♦53 (Newbie)

It will be interesting to see if this card offers users a better return than the usual reward programs. If that is the case, it may go over quite well. Time will tell.

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avatar Julie @ Freedom 48

Sounds like a great card! My only problem is that once I get established with one credit card, an newer, better one comes along and I have to fight the urge to switch. I don’t want the jumping around to hurt my credit score…

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avatar qixx ♦1,890 (Half-Dollar)

While i expect the most engaged people in a forum will likely be those that are paying no fees the card dynamics could still be swayed by which group is largest. If the first large group with the card and participating are poor managers of finance it may sway those that join later to “pick a side”. It might not be too hard to add a voting feature to the website you answer each time you log-on. And if account management is mostly online it would get better response rates. Doing something like that would be great for the experiment but not for some subgroups.

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avatar James Stein

We don’t know how successful Barclays’ crowdsourcing credit card program will turn out to be. I don’t think that the executives responsible for the program have any idea what will come out of it. What is known is that the cardholders will want ever lower costs of using their cards and ever greater benefits. Barclays hopes that it will be able to keep these demands in check by revealing just how much it costs to run the program and it also wants to ensure that its “shareholders get a fair return on their investment.” The thing is that I don’t think its customers care about those things.

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