The credit card industry is ripe for a remake, thanks not only to new heavy-handed federal regulations that put a pinch on old profit lines, but because the marketplace and the times really demand it. Barclaycard is making a bold step into brave new territory with the Barclaycard Ring MasterCard, announced in March 2012 (NYTimes.com, 5 March 2012).
The Ring will actually be a social network moderated by Barclaycard in which card members will get full disclosure on the card's profits and losses; they'll vote on changes in terms such as interest rates, annual fees and late payment penalties; and most important they'll participate in a rudimentary profit-sharing program called Giveback.
WHAT THIS MEANS TO BUSINESS
More than allowing customers to participate in setting the terms, this program hopes to foster an online community that gives as good as it takes. Barclaycard hopes to get creative feedback from Ring members that it can use in other parts of the business.
We've been urging banks to position themselves as customer partners and advocates rather than hostile rivals. This is the best example we've seen so far, at least on paper.