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Moneyforums
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 Posted: Wed Dec 15, 2004 8:59 pm Post subject: Halifax (HBOS) - Announces New Money Back Current Account ! |
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After announcing a record £4.6 billion annual profit. Halifax now turns up the steam on its rivals by announcing a cashback current account ! Goods and services bought using a debit card upto a total of £10,000 will recuieve a 1% cashback
Full press release below ------------
A MAJOR NEW ATTACK ON THE BIG FOUR
The Halifax is stepping up its attack on the Big Four banks by launching the first ever current account in the UK paying cashback on debit card purchases. More major banking initiatives will follow in the New Year.
The new product, called the Moneyback current account, offers 1% cashback on debit card purchases up to a total of £10,000 automatically payable tax-free once a year to the account holder. Halifax calculates that cashback potentially worth approximately £100 a year is available to the average UK household.
A First in UK Banking
Bank Cashback Credit Interest Rate Authorised Overdraft Rate
Halifax 1% on total purchases
up to £10,000 0.50% 13.9%
Barclays Not Available 0.10% 15.6%
Lloyds/TSB Not Available 0.10% 18.2%
RBS/Nat West Not Available 0.10% 13.9%
HSBC Not Available 0.10% 14.8%
Source: Moneyfacts, December 2004. The Halifax rates and cashback apply to accounts funded with £1,000+ per month. The Big Four rates refer to their standard current accounts where the balance is up to £100,000.
Cash Is No Longer King
Launching in February 2005, Moneyback is in tune with the premier position that debit cards occupy in the UK consumer's wallet. Debit cards now account for 65% of all card purchases and more than eight in ten adults have one. This year, plastic should overtake cash payments with the total value of card transactions expected to exceed £269 billion. (Source: APACS)
More/….
The UK consumer is ready for change, especially the 27 million current account holders with the Big Four. NOP World research, conducted on the Halifax's behalf, found that 71% of UK adults would find a current account offering cashback an attractive proposition.
The Halifax Strategy
Halifax has led the way in UK banking by offering 30 or 40 times more credit interest than the Big Four. This strategy is paying dividends. Halifax and Bank of Scotland increased their combined current account market share from 9% to 14% in just three years, a significant move in a mature market.
With the launch of Moneyback, Halifax opens up a new front by targeting the millions of frequent debit card transactors who bank with the Big Four. According to the Household Expenditure Survey, the average UK household of 2 adults and 2 children spends over £16,000 a year on everyday items and treats like food, clothing and holidays. All of these items would earn cashback if paid for with a Moneyback debit card (see Editor's Notes).
Halifax and Bank of Scotland are committed to increasing their benchmark market share in current accounts to the upper end of the published 15% - 20% range. The bank aims to do so by doubling the number of current account customers who have their main banking relationship with Halifax or Bank of Scotland: Moneyback will play an important role in meeting this target.
How the Account Works
Customers who credit their account with £1,000+ a month, an amount significantly less than the average UK net monthly earnings of £1,404, will be eligible to apply for Moneyback.
For qualifying Visa Debit transactions up to a total of £10,000 each year, customers will receive 1% cashback and 0.1% thereafter. At the end of each calendar year, the cashback earned will automatically be paid to the relevant account.
All purchases by debit card of goods and services will qualify for the 1% cashback. Cash advances, bill payments and foreign money/travellers cheque orders will not qualify.
More/….
A dedicated switching team at the Halifax will manage the smooth transfer of accounts for new customers. The team will transfer all the direct debits and standing orders on the customer's behalf. The Moneyback account will be available to existing eligible Halifax customers, unlike a number of recent current account deals offered by some competitors.
Andy Hornby, CEO, HBOS Retail, said:
"Moneyback is a genuine first in the UK banking market. The Moneyback account is a simple, value for money product that we know will appeal to the many UK consumers fed up with the poor deal they get from the Big Four banks.
Value for money is here to stay and the Big Four will just have to get used to that uncomfortable reality. We aim to make life even harder for them next year when we back the launch of Moneyback with a new high profile advertising campaign."
Peter Jackson, Head of Banking at the Halifax, said:
"Moneyback opens up a new front in the battle for UK current accounts. Up until now, loyal customers, who frequently pay by debit card, have been ignored by the major banks. Not any more.
Those customers who are disloyal to the Big Four and join the Halifax will get a much better deal. It is as straightforward as that."
Ends.
EDITOR'S NOTES
1. Banking Strategy
Halifax, and then Bank of Scotland, launched a market leading, high interest bearing current account in 2001. Since then, the HBOS market share has grown from 9% to 14%.
The success of the account, and the offer of a hassle-free switcher service, including an interest free overdraft, has seen HBOS regularly take 25% of the new to banking and switchers market.
More/….
2. Developing the banking market.
Twenty-five years ago, only 38% of the population had current accounts and a third of all adults had no account of any type. Now 93% of all adults have an account of some sort. (Source: BBA).
Segmentation is now the key to developing the market further. Halifax and Bank of Scotland have led the market in delivering banking products that meet customers' specific needs. Having addressed the "high interest" segment, we have now opened a new customer segment: "transactors". For the first time, loyal customers will be rewarded directly for conducting their day-to-day business through one account.
3. Debit Cards in the UK
The first Debit Card was launched in the UK in 1987. Since then, the number of Debit Card transactions has risen to over 3.4 billion annually. Debit Cards represent 65% of all plastic purchases worth at total of £130.5 billion in 2003. (Source APACS)
4. Earnings and Household Expenditure
Halifax calculates that the average annual net income in the UK currently stands at £16,852, or £1,404 per month. In addition, approximately 80% of households have a net monthly income of more than £1,000.
A household of two adults and two children spends, on average, £16,993 on food, drink, clothes, holidays, transport and entertainment annually. On average, single households spend approximately £8,000. (Source: Household Expenditure Survey) |
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Deborah
Veteran Investor
Joined: 12 Jul 2004
Posts: 418
Cash Points ££ 1730.36
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| Posted: Wed Dec 15, 2004 9:01 pm Post subject: |
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The new account starts from Feb 2005 and on face value looks great !
The first cashback debit card |
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