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Barclaycard: Still The King of Pla$tic?

along with several floors at Barclays' corporate HQ. Barclaycard's main offices are in Northampton. Barclaycard later became part of the Visa network.8 million outside the UK. Barclaycard claims it is Europe's leading issuer of credit cards with 10. issuing one in five UK credit cards. The Barclaycard was the first credit card introduced in the UK.4 million customers in the UK. part of Barclays Retail and Business Banking. Nowadays. London.Introduction Barclaycard.4 million customers in the UK and 10. . coming into service in 1966. One Churchill in Canary Wharf. is a global payment business. It enjoyed a monopoly until the introduction of the Access card in 1972. • Barclaycard has 10. Barclays offers both MasterCard and Visa versions. It is currently the leading UK credit card issuer.

it was still possible to guarantee Barclays Bank cheques using a Barclaycard well into the 1990s. .com/news/fullstory. Barclays were the only major British clearing bank not to issue cheque guarantee cards. instead allowing its customers to guarantee cheques with their Barclaycard (on the basis that if a customer was creditworthy for a Barclaycard they were also good for issuing cheques). (see http://www. This practice ended in 1985 with the introduction of relaxed lending rules and the introduction of the debit card Barclays Connect. It is one of the main employers in Northampton.It is based at 1234 Pavilion Drive in Northampton in a specially designed building where it employs approximately 3000 people.aspx? newsitemid=21848). Some of Barclaycard UK customer service representatives appear to be based in India.finextra. however.

Origin of Credit Cards and Barclaycards Credit cards emerged in the first half of the 20th century. Initially credit cards were used for identification purposes against noncash purchases. • 1963: American Express is launched in the UK • 1966: Barclaycard is launched • 1977: Barclaycard becomes a founding member of the international Visa system • 1986: Barclaycard launches first loyalty scheme • 1990: Barclaycard MasterCard launched . Timeline of Barclaycard UK: • 1962: Diners Club becomes the first major charge card company in Britain following the merger of Finders Services and Credit Card facilities.

2012: Barclaycard remove their Freedom rewards scheme. Discover Financial Services' UK credit card division. launches Contactless mobile payments the first in EU.1997: Barclaycard is the first UK credit company to allow bills to be paid over the Internet 2008: Barclaycard purchases Goldfish. second after Turkey in Europe. in partnership with Orange. 2011: Barclaycard. .

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Centralized database. Bank came up with real time operations with the help master card and visa. First bank to enable credit card payments over the internet. . BARCLAY and IBM mark the innovation of Electronic banking. IBM came with innovative concept called magnetic stripes.Information Technology • • • • • • • • • 1ST mover in issuing credit cards and early adopter of information technology. ATM was launched to lower the cost of banking services. A/C number. Magnetic stripes store a small amount of information such as customer info. Real time are systems that respond to input immediately.

1. 2.Transaction Processing v Large Scale Economies: Due to dominant market share of Visa and MasterCard cards. Global communications infrastructure.processing of credit card transactions is determined by these two networks. High one-off investments. .

Visa member banks had already issued 23 million chip cards and were offering ecommerce transactions which were supported by Visa’s Secure Electronic Transaction platform.Technological Development • • • • • Smart or chip cards. The UK's nationwide roll-out for chip cards started in the late 2003. By the roll-out date. The aimed to cut down credit card fraud by two-thirds. The initial benefit of chip was to reduce counterfeiting and to increase security for Internet and other remote transactions. .

innovations in information technology also offered the potential for transactions between personal or commercial customers and retailers to be handled directly and securely without the need to contact their banks. the smart card based electronic wallet developed by National Westminster Bank. • . • Technological twist. • The chip roll-out originally presented issuers. retailers and end consumers with technological and user educational challenges. MasterCard had developed similar capabilities through its purchase of Mondex.At the same time.

Card Profitability .

Average revenue stream for credit card issuers & processors .

. Checks on credit licenses and fines were getting developed in the UK & this is what was worrying people at Barclays . Consumer debt were increasing year by year. Consumer found credit card advertising confusing & language of paperwork unintelligible. Criticizing issuers as whitewashing because they did not reveal hidden charges and consumers had no info about it. Government regulation –white paper on credit card borrowing.Challenges to Barclaycard • • • • • • • • Threat from its competitors in UK market . Barclay was criticized for its “zero % forever card deal” by Office of fair trading.to be king of plastics!!. Government had capped the interest rates due to consumer pressure.

(Chaos in the Skies-Alliance) Entrance into new geographical areas.(McD) As Barclay was linked to visa network it had tremendous growth in UK.Barclaycard’s Strategy • • • • • • • • They focused on Product Differentiation.(LG) Ability of Barclay cards managers to avoid price competitionfocusing on branding and product. Gold Card features were customized.(McD) Offered some customized products and offers to selected customers (depending on customer relationship with the bank).Cross border growth.(LG-sampoorna and cineplus) Alliances with various telecom and retail companies. Threat from UK retail banks – bundled credit cards with other banking products. .

Submitted By: Ankur Vijayvargiya Naresh Swami Hardeep Sinh Devdhara .