Bankcard Background
Bankcard was established in 1974, at a time when the only type of credit cards around in Australia were those issued by a handful of stores, along with American Express and Diners Card. These were charge cards, which are different from credit cards in that the former requires that the balance on the card be paid off each month.
One of the disadvantages to the types of charge cards available in Australia prior to Bankcard is that they were geared towards business travellers, and thus, were typically only accepted a select number of pricey restaurants and hotels. They could also be used at airports. Additionally, store charge cards typically could only be used at that particular store that issued the card.
Why Bankcard Was Launched
Australia is a large country, and thus, a relatively expensive place to establish a credit card. This would require high distribution costs and there was no one bank in Australia that was truly prepared to set up or establish a credit card.
To remedy this problem, several banks decided to partner up and requested a licence permitting them to offer credit cards to customers. This licence was granted in 1972. Prime Minister Gough Whitlam then launched Bankcard in 1974.
A huge marketing campaign was launched with the biggest direct mass mailing ever to take place in Australia at that time and to this day. As part of this mailing effort, the banks sent many Australians pre-approved credit cards having a credit limit of $300 to help assuage people’s anticipated resistance to taking on a credit card. By the time the marketing campaign was over, over one million people had obtained this new credit card. Ultimately, this credit card became the largest credit card provider in Australia. Indeed, at some point it had as many as five million customers.
Problems with Bankcard
As attractive as it was to customers, this new credit card also had some problems. Foreign card operators, especially MasterCard and Visa, entered the market and began offering credit cards themselves. At first they did so through smaller banks and credit unions. In addition to facing this competition, Bankcard was limited in the fact that vendors outside of Australia or New Zealand rarely accepted it.
Banks in Australia slowly but surely started to drop this card. One exception occurred in 2006, when NAB offered the card. Some other banks in Australia provided legacy accounts as a service to those customer who already had this credit card. Finally, at the end of 2006, Bankcard was taken out of the market completely and was not to be offered again.
