In an effort to more effectively rival traditional British banks, Virgin Money announced it is increasing its credit card capabilities and moving processing in house under a new £1 billon ($1.59 billion USD) deal with MBNA, a division of Bank of America. While the deal is a move to increase Virgin’s competitiveness with rival banks, MBNA will process the majority of Virgin’s credit card transactions.But Virgin has not ruled out the possibility of completely buying out all MBNA credit card operations in the future.
The move further emphases Virgin Money’s expansion plans, chief executive at Virgin Money, Jayne-Anne Gadhia commented on the move, “A credit card business will complement our existing mortgages and savings business and represents another significant step in growing our bank.” With the new deal, as well as an expected launch of a new checking account, Virgin is moving to capitalize on widespread consumer discontent with the banking industry as a whole and attract customers who are interested in a new and potentially innovative banking experience.
While Virgin has taken the right steps towards accomplishing this goal, including taking over the troubled bank Northern Rock, from the British Government, and thus gaining 75 branches in the process, only time will tell if the notoriously financially stubborn British consumer will buy into Virgin Money’s banking vision.
Click here to read more from the Daily Mail.
