Barclaycard loyalty for South Africa's Man-U fans
More than 3.8 million Manchester United football fans in South Africa are to be offered a co-branded loyalty credit card from Barclaycard, following the formation of a new joint division of Barclays Bank (UK) and Standard Bank of South Africa.
The new Barclaycard division has launched The Manchester United Barclaycard as the first of four new credit card products to be introduced during the next six months. The new division will be jointly funded, and all income generated will be equally shared by Barclaycard and Standard Bank.
Opportunities Following extensive international research, Barclays found South Africa to be a credit card market bearing considerable opportunities. For example, credit card balances in South Africa currently account for only 7% of unsecured lending (compared to 18% in the UK, and 32% in the USA). Moreover, only 5% of South Africa's black population use credit cards, compared to 46% of the white population.
"This partnership combines Standard Bank's established infrastructure and presence in South Africa with Barclaycard's risk management and customer acquisition skills," said Barclaycard International's managing director, Barry Fergus. "Barclaycard also brings the Manchester United brand to the table which is a big plus for the South African market."
Manchester United supporters The initial launch of the Manchester United card will target the 3.8 million registered supporters of the club in South Africa, offering RedRewards (the card's official loyalty programme) and other prizes including trips to Old Trafford (the team's home ground in the UK).
RedRewards, which was launched in the UK in February, 2003, grants its members an entry into one of the programme's regular prize draws for every 50 RedPoints earned by making purchases using the card.
Shared know-how The two companies both bring strengths and skills to the new division, and are able to share skills, know-how, and resources to target segments of the market that are under-penetrated, while taking advantage of incremental cross-selling opportunities.
Barclaycard brings to the table its global brands (such as Manchester United), a heritage of 30 years in the international credit card market, and its advanced risk prediction techniques. Standard Bank will also share its experience in transaction processing and customer service, local market knowledge, an extensive branch and ATM infrastructure, collection competencies, regulatory support, and access to the football sponsorship properties of Kaiser Chiefs and Orlando Pirates. Standard Bank also brings its existing bluebean.com book (which currently has 95,000 customers) to the partnership.
Barclays has granted Standard Bank preferential price access to the Barclays ATM network for all Standard Bank and Stanbic cards issued in Africa under the Visa badge, and has also undertaken to issue cards on behalf of Standard Bank and Stanbic Bank in Botswana and Kenya.
Management The new division will be run by a locally based eight-person Barclaycard executive management committee, comprising the managing director, financial manager, and 6 other representatives (3 from each bank). The committee will appoint credit, audit, and risk committees, as well as a management committee to ensure that the newly formed division's best interests are observed.
Barclaycard will drive initial sales through a toll-free telephone number, with no sales being made through Standard Bank's own branches. Standard Bank, however, will provide the call centres, customer service centres, application processing, and the initial credit scoring process for the first year. Following that period, Barclaycard will introduce its proprietary credit scoring technology tailored to reflect local market conditions.
"We have been in discussions with Barclays to relaunch Barclaycard in South Africa for over two years," said Peter Wharton-Hood, managing director for Standard Bank Retail Banking. "Both banks share a common vision for the South African market and compliment each other's strengths."