Barclays has established itself as the fastest-growing major credit
card issuer in the US with the announcement that Barclays’ US
credit card business has passed the $5 billion mark in credit card
receivables. Now, the issuer is moving into the growing contactless
payment market with the launch of a Visa-branded payWave card, and
has also made a senior executive appointment to its management
team.
Despite sluggish credit conditions in the US, Barclays’
outstanding loans have grown from $1.4 billion at the end of 2004
to more than $5 billion in two and a half years. The number of
accounts has grown fivefold from 700,000 to more than 3.5 million.
Barclays grabbed a foothold in the US market in 2004 with its
acquisition of Juniper Bank.
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Barclays sought out Juniper because of its strategy of providing
co-branded cards and services, catering predominantly to prime and
super-prime customers in credit quality terms. Earlier this year,
when announcing its interim results, Barclays said that Barclaycard
posted income growth of 8 percent, driven by momentum in
Barclaycard International, but this was more than offset by rising
impairment charges and greater levels of investment in Barclays US,
although the company expects to break even later this year. The
number of cards in issue has increased from 1.1 million to 4.2
million.
A top ten US issuer
According to Lloyd Wirshba, CEO of Barclays’ US credit card
business, Barclays’ momentum will soon take it into the top ten
issuers in the US, although it has some way to go before it catches
up with the likes of Citi, JPMorgan and Bank of America, which are
the dominant issuers. Barclays was the 13th-largest US credit card
issuer in 2006, when card loans rose 85 percent to $3.97
billion.
The success of Barclays in expanding its share in the US market
represents the issuer’s long-stated strategy of gleaning a greater
portion of its profits from international markets, amid difficult
credit conditions in its saturated UK home market. Barclays US is
on track to be profitable in 2007 and is expected to deliver $150
million of pre-tax profit in 2008.
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By GlobalDataSince 2004, Barclays has partnered with more than 50
organisations across the travel, entertainment, retail and finance
sectors in the US. It is expected to announce at least four more
partnership deals over the coming months.
The issuer is also hoping to grab a slice of the US’s burgeoning
contactless payment market with the launch of the BJ’s Visa card in
conjunction with retailer BJ’s Wholesale Club. Cardholders will
earn two reward points for every dollar spent on eligible BJ’s
purchases and one point for every dollar spent on all other
purchases. Barclays also plans to issue a business credit card for
BJ’s business members beginning in January 2008.
The card also incorporates Visa’s contactless payment
technology, payWave, which is currently accepted by more than
32,000 US retailers.
New COO for US card business
Barclays has appointed Joe Purzycki to the position of chief
operating officer for its US credit card business. Purzycki, an
18-year banking industry veteran, is responsible for all
operational aspects of the business, including customer support,
collections and technology. He will continue to serve on Barclays
executive committee.
Purzycki will lead efforts to drive bank-wide efficiency,
innovate with new technologies, improve the customer experience and
provide foundational support for Barclays’ growth. Previously,
Purzycki held various senior management positions with leading
banks and credit card issuers such as MBNA, First USA and JPMorgan
Chase. Most recently, he served four years as head of new business
development and sales for Chase Card Services. In 2000 and 2001, he
acted as chief administrative officer for Juniper Bank, prior to
its acquisition by Barclays.
