Both Citibank and Virgin Money are proud to announce that on July 27 a new credit card suite will be introduced. This is a joint venture between the two banking giants and will be an online banking system complete with products for any mortgage needs.
This venture will start out by attracting customers with low rates and work up to a complete banking model with full services offered.
The Virgin future in Australia
The question remains whether the banking license with Citigroup and the Virgin Money brand power will become a powerful new retail banking force.
There are about 40 people that are employed with Virgin Money in Sydney right now but this is expected to grow to approximately 350 employees following the launch of the new joint venture.
This launch follows the end of an era for Westpac and Virgin Money. They parted company when both sides were following different incentives. Virgin was rewarded for the amount of cards they were issuing and Westpac was doing its best to make money from the deal. Virgin Money was able to issue more cards than expected and this influx was overpowering for Westpac. Credit control disputes and some processing problems came about and they decided to part company.
Virgin Money also had a joint venture happening with Macquarie that ended when high capital costs hit and forced Macquarie to close its mortgage operations. Since that time, Macquarie and Virgin have re-started another venture with Citigroup. The structuring of this deal is being kept quiet except for the fact that it is a split of 50-50 more or less. This will avoid any problems that they have had in the past since both groups will be rewarded approximately the same amount.
Virgin Money targets the younger demographic group that is aged 25 and up to 44. While the branding for Virgin is directed to young people, Richard Brandon is now 60, Virgin blue is 10, the Virgin group is 40 and Virgin Atlantic is 25 years old.
Virgin Money is hoping to cash in on the growth of 5% that was seen during the year past in receivables for credit cards. The new products offered by Citibank and Virgin Money will concentrate on low fees to entice the market crowd that is looking for these products.
The new credit cards will have a link over to the Velocity program with Virgin blue in an attempt to better compete with the major Australian airline Qantas.
It will be interesting to see the results of this Virgin Money/Citibank project and what kind of impact they make on the banking industry and the airline industry in the near future.
Related posts:
- Virgin Credit Card Relaunch 2010
- Virgin Money Press Release
- Virgin Credit Card – Details and Application
- Virgin Credit Card Details and Application
- Virgin No Annual Fee Credit Card – Review & Application
- Virgin Flyer Credit Card-Review and Application
- Bankcard in Australia
- New Virgin Credit Cards Launched
Posted on Tuesday, July 20th, 2010 at 11:15 am
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