agreement with British Airways allowing it to provide credit cards
to British Airways ‘Executive Club’ customers, Cards International
has learned.
agreement with British Airways in Germany and will be launched in
relevant markets later this year. Initial details are sketchy but a
source familiar with the deal said it did not include the UK, where
British Airways already works with American Express, and is not
thought to impact British Airways’ other working relationships like
its partnership with JPMorgan Chase in the US.
launched initially in the United Arab Emirates, where it already
offers a limited credit card range, and some markets in continental
Europe. The source said the deal had been signed but the partners
are still mapping out some of the finer details, including what
features the product will offer beyond allowing users to earn air
miles by booking flights through the credit card.
Diversification strategy
Go deeper with GlobalData
The agreement with British Airways marks another step in
Barclaycard’s diversification strategy, which has seen it evolve
over the last four years from being a UK-focused, single brand
business to an international multi-partnership credit card
issuer.
overseas, particularly in the US where it has emerged as the
fastest growing and 11th-largest card issuer. Barclaycard has
co-branding and joint venture agreements with businesses including
US Airways; BJ’s Wholesale Club, a warehouse retail chain; Best
Western, a hotel group; Travelocity, an online travel agency; and
Carnival Cruise Lines.
credit cards in the UK, aims to become a top 10 issuer in the US
within the next three years.
the first time in the US, despite the increasingly strained
economic and financial environment in the country. It had
outstandings of $6.5 billion in the US, a fourfold increase from
its 2005 level of $1.6 billion. As well as targeting partners from
a range of industry segments, it expanded its product range to
include prepaid debit cards. The business remains on track for a
profit before tax goal of $150 million in 2008.
2007 profit before tax outside its domestic UK market, with 80
percent of its new cards issued abroad (see CI 399). It is the
largest issuer of revolving cards in the German market and, through
its Entercard initiative with Swedbank in the Nordic region,
Barclaycard has become the third-largest issuer in Norway and
Sweden. It is also the second-largest issuer in South Africa
through its subsidiary Absa.
Increasing UK partnership deals
Barclaycard originally developed its partnership business model to
beef up its presence internationally. But its success has meant
joint venture and co-branding deals have featured increasingly in
its UK franchise. It now has numerous partnerships in place
including Sky, the satellite TV broadcaster; Argos, a retail chain;
Thomas Cook the travel agent, and Intercontinental Hotel Group. The
credit card business is also believed to have other deals in the
pipeline.
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By GlobalDatathe British Airways deal. But he told CI: “Barclaycard is trusted
by these big brands and trusted to deliver these products and
services and that’s why our partnership business is growing.”
