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14


NEWS


TSB drops Visa to sign debit deal with Mastercard


customers issued Mastercard debit cards from 2018 onwards. The partnership, expected to last until 2024, means that TSB will be Mastercard’s largest debit card issuer in the UK.


T


The deal will also include TSB business customers and their commercial cards. Mastercard plans to equip TSb with its “digital payments expertise, fraud analytics and innovation capabilities”. Cardholders will also receive “exclusive” offers from the issuer’s sponsorship assets.


Mark Barnett, Divisional President for Mastercard UK and Ireland, labelled TSB a “a trusted and successful challenger bank”. The deal, he added, is an example of Mastercard’s “commitment to grow the issuance of debit” among its banking partners.


The bank had held a partnership with Visa, a deal which it decided not to renew. A TSB spokeswoman told IBS Journal that the FI had “enjoyed working with Visa” and continues to have “a strong relationship” with the firm.


TSB, called a Challenger Bank by some, has more than 5 million customers in the UK and accounts for around 4.5% of the current account market in the country. The firm is a subsidiary of the Sabadell Group, its divestment from Lloyds Banking Group having been completed in July 2015.


Greener grass


Codenamed “Verde”, the divestment plan moved 632 Lloyds branches to TSB. Customers with accounts held by the branches and staff employed within them were also transferred to TSB.


Several Lloyds TSB branches in England and Wales, together with all branches of Lloyds TSB Scotland and Cheltenham & Gloucester, were merged to form the new business. The remainder of the Lloyds TSB business was re-branded back to the Lloyds Bank name.


Sabadell allocated three years and £450 million to the technology project at TSB. At the time of the acquisition it was reported the group would try to move TSB onto its own core banking system. A similar play had been made by Santander when it acquired Alliance & Leicester and Bradford & Bingley.


The migration to the proprietary Proteo platform will cut costs by £160 million annually, according to the Spanish group.


The strategy appears to have worked, as TSB a massive jump in pre-tax profits in the first six months of 2016. It hit £125.4 million, up from £23.2 million a year. In the same period, 7% of all customers opening a new bank account or switching banks chose TSB.


Chief Executive Paul Pester said at the time that customers had been “voting with their feet”. The “extra firepower” from the Sabadell Group, he added, has helped it “take on” the big banks. Pester also called on regulators in the UK to break the back of the larger banks in the UK to help bring competition to bear in the market.


TSB rolled out a new mobile banking app, based on the Proteo system, in April this year. Available for both Android and iOS devices, updates included “simplified” access through fingerprints and one-hand navigation for the most-used transactions.


SB has signed a deal which will see all its


www.ibsintelligence.com © IBS Intelligence 2017


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