Saturday, May 21, 2011

Brand Update : Barclaycard RIP ( 2008-2011 ?)

According to newspaper reports, the Barclay's Corporate which runs the credit card business has decided to put Barclaycard on the block. The report further suggest that Barclays is going to scale down its retail operations owing to the bad debts accumulated during recession. The unofficial number of creditcards of Barclays is put at 2.4 Million.
Barclaycard was launched with much fanfare. The brand offered several differentiators which was later matched by other players. The company was in the dilemma of choosing between high risk Vs growth. Finally it decided to sell of the credit-card business and concentrate on other banking domains. 
Credit card brands are a confused lot. On one hand they want the users to splurge  and on the other hand, they worry about bad debts. Greed makes these brands charge exorbitant charges which adds to bad debts. It is a vicious cycle.
Having said that, Barclays had a reasonably good business albeit small in market size. That may bring in some suitors who wanted to scale up their business. Barclaycard failed because the brand lacked the distribution reach which is essential to scale up. The recession add to its voes for fear of accumulating bad debts.
Anyways another brand is going to die. RIP

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