On Monday, Barclays unveiled their latest credit card, the Barclaycard Ring MasterCard, announcing it as the first “crowdsourced” credit card and touting their socially-conscious, community-friendly practices in an effort to attract social-media savvy consumers with a “DIY” mindset.
According the Wall Street Journal, the Ring card will feature no annual fee and have no fees for balance transfers, and won`t penalize late payments with a higher rate. It will have a flat interest rate of 8% for all cardholders – significantly lower than the national average, which sat at 14.87% last week. It also doesn`t offer any rewards programs, and instead gives cardholders an opportunity to participate in discussions about card policies, and maybe even offer profit-sharing benefits in the future.
Traditionally, people have looked for credit cards offering the best rewards, such as cash-back bonuses, airline miles, and hotel stays. But in today`s economy, as concern about predatory policies by big banks grows and Americans are angered by bank CEOs outsized bonuses, more people may be attracted to a card that advertises itself as offering simplicity and transparency.
The term “crowdsourcing” has become a big buzzword, ever since it was coined by Jeff Howe in Wired magazine, back in June 2006. He defined it as “the act of a company or institution taking a function once performed by employees and outsourcing it to an undefined (and generally large) network of people in the form of an open call.”
Barclaycard Ring cardholders will be able to participate in an online forum where they can voice their opinion on things like card terms and conditions and new features being considered. Information about profit and loss will be readily available, giving customers a sense of personal investment in the company which will, Barclays hopes, translate to increased customer loyalty and trust.
Paul Wilmore, managing director of consumer markets for Barclays, says “people are losing trust in the banks. We want to change the way people think about credit cards and their credit card company by putting the power back in the hands of customers.”
But is this just another example of big business trying to take advantage of popular sentiment and jump on the bandwagon with the 99%, even as they rake in profits? Socially-conscious and globally responsible as they may be, British-based Barclays is still one of the biggest banks in the world. When they pulled out of a deal to buy Lehman Brothers in 2008, it prompted Lehman Brothers to file for bankruptcy, sounding off the financial crisis that had been brewing since 2007. Afterwards, Barclays did end up buying out the North American operation of Lehman Brothers, which greatly expanded their reach in the region.
Aiming at a demographic more enamored with grass-roots ideals than big-business practices may pay off big for Barclays, as many Oprah-loving, Real Simplemagazine-reading Americans strive to simplify life and shrug off rewards-based luxury credit cards. It remains to be seen how the card will be received by the public and whether Barclays will start a consumer “crowdsourcing” revolution.