Competition in the New Zealand Credit Card Market from the Consumer Perspective

What is it about?

It is common to argue that markets are competitive when there is a significant range of options, including with respect to price, for consumers to choose between. As such the New Zealand credit card market might be regarded as competitive, but what we see in practice is a high degree of similarity in different banks’ offerings. Previous studies in the United States market have suggested that consumers fail to distinguish between different banks’ credit card offerings, and that this contributes to the high profitability of their credit card businesses. This study looks at consumer awareness of the pricing of credit card services in New Zealand, and finds that it is very low. This suggests that the extent of actual effective competition in the New Zealand market may be overstated.

Featured Image

Why is it important?

This study looks at consumer awareness of the pricing of credit card services in New Zealand, and finds that it is very low. This suggests that the extent of actual effective competition in the New Zealand market may be overstated.

Perspectives