Virgin to challenge cards market
(29 July 2010− Australia) Sir Richard Branson’s Virgin Money has made a bid to snatch a slice of Australia’s credit card market by launching two new credit cards.
Developed over the last year with Citigroup, the two new cards offer "no annual fee ever" and charges a low 2.9 percent interest on balance transfers for the first six months, and then 16.95 percent.
An online savings account has also been launched and the duo has plans to develop mortgages and transaction accounts, said Matt Baxby, Virgin Money’s chief executive of Australia.
The big four dominate mortgages, so I think getting these products to market is going to be important for us, Mr Baxby highlighted,
Virgin is not going to roll into it straight away, but wait until we've got these (credit cards) right and we've invested the time, Mr Baxby added.
This is not Virgin Money’s first time dabbling in the Australian credit card market. Six years ago Virgin offered a low-rate interest rate card through Westpac.
At the end of the five year contract Westpac inherited 750,000 Virgin customer credit card accounts.
Mr Baxby said Virgin Money aimed to compete aggressively on retail deposits, despite the aggressive price war between the major banks over interest rates.
The major banks all have a big back book of customers they need to protect. We don't have that and it's one of the benefits of being a new competitor. As the next guy entering the market, you can charge sharply, Mr Baxby said.
The online savings account, the first time Virgin Money has offered retail deposits, has an introductory rate of 6.75 percent for four months and 5.35 percent thereafter for up to A$1 million.
An online savings account has also been launched and the duo has plans to develop mortgages and transaction accounts, said Matt Baxby, Virgin Money’s chief executive of Australia.
The big four dominate mortgages, so I think getting these products to market is going to be important for us, Mr Baxby highlighted,
Virgin is not going to roll into it straight away, but wait until we've got these (credit cards) right and we've invested the time, Mr Baxby added.
This is not Virgin Money’s first time dabbling in the Australian credit card market. Six years ago Virgin offered a low-rate interest rate card through Westpac.
At the end of the five year contract Westpac inherited 750,000 Virgin customer credit card accounts.
Mr Baxby said Virgin Money aimed to compete aggressively on retail deposits, despite the aggressive price war between the major banks over interest rates.
The major banks all have a big back book of customers they need to protect. We don't have that and it's one of the benefits of being a new competitor. As the next guy entering the market, you can charge sharply, Mr Baxby said.
The online savings account, the first time Virgin Money has offered retail deposits, has an introductory rate of 6.75 percent for four months and 5.35 percent thereafter for up to A$1 million.
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