Earlier today (June 10) supermarket giant Tesco launched its first current account, offering 3 per cent interest and Clubcard points, while Barclays has announced that it is launching a contactless payments wristband for customers next year.
Tesco already has six million customers signed up to its credit cards, which account for 12 per cent of the UK’s credit card spend, but is now entering the market as one of the so-called ‘challenger’ banks.
Customers will be able to sign up for a Tesco current account for free, as long as they pay in at least £750 a month, and the account will pay an interest fee of 3 per cent on amounts up to £3,000, while there will be no fixed monthly fee for an agreed overdraft.
Tesco’s Chief Executive, Benny Higgins, said that Tesco’s accounts will bring in a “fiercely competitive” customer focus into banking, which currently does not exist, and hit out at the “ridiculously poor value” offered by the big players.
Mr Higgins declined to say how much of the market share Tesco was aiming for but, if the current accounts take off like the credit cards, then it could rival the size of HSBC, which together with its First Direct brand has just over nine million UK current account customers, representing 13 per cent of the market.
Meanwhile, Barclays will launch a contactless payments wristband for consumers in 2015, called bPay, with trials of the wearable technology starting at sponsored events this year, launching at the music festival in Hyde Park next month.
The wristbands will be open for use by the majority of UK card holders, not just Barclays customers, and the bank hopes that the device will encourage cash-free payments as consumers increasingly turn to card and contactless payments.
Barclays launched Britain’s very first contactless card in 2007 and said it has plans to put the technology in a number of other everyday objects, such as key fobs, to encourage more contactless payments.