Amanda Smith
Athena Cocoves
From payment networks to the Big Four banks and beyond, Australia’s credit card industry has a lot of players. Here’s what you need to understand about the different types of credit card companies that make up the industry.
What is a credit card company?
Credit card companies primarily come in three forms:
- Credit card networks (or credit card associations) process payments and facilitate network services, like credit card transactions.
- Credit card providers (or issuers) supply credit cards to consumers. Credit card providers in Australia are banks and financial institutions, like credit unions and online credit providers.
- Credit card brands are airlines and retailers that partner with a provider to offer certain types of credit cards.
» Don’t skip the basics: What is a credit card, and how do they work?
Credit card networks in Australia
Australia’s three major credit card networks are Visa, Mastercard and American Express (AMEX).
Other notable networks include Diners Club and the now-defunct Bankcard, which closed Australian operations in 2006.
Credit card networks set up the infrastructure to facilitate and process credit and debit card payments. They are responsible for things like:
- Authorising purchases and other transactions
- Verifying a cardholder’s identity through security measures like CVVs
- Transferring, clearing and settling funds
- Protecting against fraud
- Monitoring suspicious activity, like credit card scams
- Facilitating communications between cardholders, merchants, banks and other parties.
To cover costs, credit card networks charge merchants surcharge fees to process transactions.
Credit card network vs provider
A credit card network isn’t the same as a provider; a provider isn’t always a bank. For example, CommBank’s credit cards are on the Mastercard network, and ANZ offers Visa cards.
However, this distinction isn’t always the case:
- AMEX is both a network and a provider since it directly issues credit and charge cards to consumers.
- Diners Club is both a network and a provider of business and corporate charge cards, often with a companion Mastercard. Despite fading in popularity and availability, Diners Club currently also provides travel cards to Australian Government public servants.
Consumers usually associate credit card companies with banks, but as a cardholder, you’ll deal directly through the credit card provider more often than the network.
For example, if you’re searching for a credit card, you’ll compare product options from banks, not networks. You’ll apply to the provider when you want to get a credit card.
Credit card providers in Australia
Credit card providers in Australia include banks, credit unions and online financial institutions. These companies issue cards and determine the features, such as the interest rates, fees or rewards structures. They also provide the credit that cardholders must repay after receiving their credit card statement.
Banks — big and small
The Big Four banks — CommBank, Westpac, ANZ and NAB — are where consumers usually look first, simply because of their brand presence and market reputation. Other major players in the credit card space are Citi, AMEX and HSBC.
However, there are plenty of places to obtain credit beyond these common names. Regional banks and smaller financial institutions are growing in popularity every year as consumers turn to them for alternative products, deals and services. These smaller banks include:
- ING
- Macquarie Bank
- Suncorp Bank
- Bankwest
- Bendigo Bank
- Bank of Queensland
- Bank of Melbourne
- ME Bank
- St.George Bank
- People’s Choice.
There are also industry-specific card providers, such as the Australian Military Bank, Defence Bank, Police Credit Union, Police Bank and Teachers Mutual Bank.
Credit unions
There’s a growing movement of alternative, non-bank credit card options in Australia. That includes credit unions — member-owned financial institutions that function similarly to banks but return profits to members (like a cooperative).
Credit unions typically offer lower interest rates, lucrative rewards and a connection to the community. While they may offer a friendlier experience, they generally have fewer options than a traditional bank. However, to some, banking with a credit union is favourable to giving their money to a big conglomerate.
Some of the credit unions in Australia include:
- Heritage Bank
- Community First Credit Union
- Holiday Coast Credit Union
- Macquarie Credit Union
- My Credit Union
- North Inland Credit Union
- Sydney Credit Union (SCU)
- Woolworths Employees Credit Union
- Australian Unity.
Online issuers
Beyond banks and credit unions, you’ll also find various websites that offer credit cards and loans. Latitude, a digital lending business, is one example.
There’s also a category of virtual credit card products that are digital, flexible and linked to brands. MoneyMe is one of these new types of no-card options.
As with all online issuers and brands you may not recognise, you should read the fine print carefully before applying for a credit card.
Credit card brands in Australia
Airlines, supermarkets and retail companies partner with credit card providers to issue co-branded cards, such as store and frequent flyer credit cards. For instance, NAB is the provider that issues co-branded Qantas Premier cards and Coles store cards.
Examples of widespread credit card brands in Australia include:
- Qantas Money
- Virgin Money
- Jetstar
- Coles
- Woolworths
- David Jones
- Myer.
How are credit card companies regulated in Australia?
In Australia, the banking industry, which includes credit card companies, is governed by regulatory authorities, including:
- Reserve Bank of Australia (RBA)
- Australian Securities and Investments Commission (ASIC)
- Australian Prudential Regulation Authority (APRA)
- Australian Transaction Reports and Analysis Centre (AUSTRAC).
Added protections for Australian consumers come from the National Consumer Credit Protection Act (NCCP), which the ASIC imposes.
Retail and customer-owned banks (credit unions, building societies and mutual banks) follow APRA’s regulations. APRA ensures that banking entities have sufficient financial means to meet consumer obligations.
Regulation protects individuals from companies using loopholes and predatory lending practices, targeting those who can’t access credit through traditional means.
Frequently asked questions about credit card companies in Australia
The Big Four banks — Commonwealth Bank (CommBank), Westpac, ANZ and NAB — issue the lion’s share of cards on the market (nearly two-thirds of all consumers). Smaller banks and credit unions are also becoming popular as credit card providers.
Australia’s major credit card networks are Visa, Mastercard and American Express.
Most Australian banks offer credit card products. While the features will differ, most offer some credit options.
About the Author
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