U.K. Retailers’ Banking Push Continues with Tesco Current Account (June 11, 2014)
As U.K. retailers move further into providing personal banking services, supermarket giant Tesco has launched its first-ever current account. Offered through the company’s Tesco Bank arm, the account offers interest of 3 percent on balances up to £3,000 (US$5,034), and loyalty points on purchases made with the account’s Visa contactless debit card. Accountholders can make deposits at more than 300 Tesco store locations.
Tesco already offers a Paybefore Award-winning line of prepaid gift and travel cards. The company has been building toward launching a standalone bank since 2008, when it bought out its joint venture partner, Royal Bank of Scotland, and become sole owner of Tesco Bank. The bank currently has 6 million saving and loan customers and its credit card holds a 12 percent share of the U.K. market, according to the company.
Retailers in the U.K. are among the most active players in an increasingly competitive personal banking industry. Last year, British lawmakers set rules making it easier for customers to switch banks quickly and easily, in a bid to break the long-held dominance of the country’s “Big 5” banks. Tesco rival Marks & Spencer last month launched a current account of its own, while Sainsbury’s last year took sole control of a banking joint venture it had operated with partner Lloyds.
In the U.S., Walmart’s earlier efforts to buy a bank and gain its own banking license hit several regulatory snags, leading the retail titan to expand its MoneyCenters as well as its assortment of GPR cards and, more recently, partnering with American Express on Bluebird, an alternative debit, checking and P2P platform. This year Walmart also expanded its money transfer services.
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