Lloyds TSB is in talks with a number of non-financial organisations, in preparation for its first foray into the 7.3bn affinity credit card market.
Lloyds TSB group marketing director Ford Ennals says: “We are talking to a number of potential partners which we believe offer a good strategic fit with our brand. We do a lot of rugby sponsorship and want to develop that part of our operation with a rugby-related affinity card.”
Affinity cards are credit cards issued by banks on behalf of groups such as charities and football clubs which attract customers to a card connected with their hobby or interests. Cardholders know that the organisation offering the card will benefit financially from a percentage of the spend and the annual fee.
Ennals adds: “No one in this country has yet found a profitable model for issuing affinity cards, nor have they really succeeded in capturing the public’s imagination. In the US they have done both.”
Datamonitor business analyst for cards and payments Julie Cunningham says: “The UK affinity card market is underdeveloped, which is one reason why US banks such as MBNA have come over and been so successful in this area.”
Datamonitor estimates that there are 2.5 million affinity cards in the UK, representing ten per cent of the credit card market.