Source: Virgin Money
Virgin Money and Westpac Banking Corporation have agreed a deal on the Virgin Credit Card.
Westpac will retain the credit card portfolio and has been granted an exclusive brand licence by Virgin until June 2009.
Westpac will pay Virgin Money $39 million over 14 months. Virgin Money has agreed not to re-enter the credit or debit card market over the duration of the new agreement.
Virgin Money shook up the Australian financial services market in 2003 when it launched its first financial services product, the low rate, no annual fee credit card with Westpac.
The agreement with Westpac was a five year agreement due to end in May 2008. The end of the contract gave both parties the opportunity to review the structure of the business. Westpac retaining the portfolio was agreed as the best option, with Westpac being able to provide ongoing excellence in customer service to Virgin credit card customers and minimal disruption to their credit facilities.
Virgin Money chose Westpac as its credit card issuer in 2003 as it was a leading supplier of credit cards and had the ability to provide the high standard of customer service required for the Virgin Credit Card. This new agreement allows Westpac to continue to manage the customer base and ensures that there are no interruptions to the credit card service. The Virgin Credit Card will continue to operate normally for customers. During the extended licensing period no new Virgin Credit Cards will be issued and Westpac will issue customers with a competitive replacement offer.
Virgin Money will continue to focus on building its own portfolio of financial services products which includes Virgin Money Super and Virgin Money Home Loans. Virgin Money continues to investigate opportunities in financial services.
"We are pleased to have come to an agreement with Westpac on what has been a very successful product," said David Wakeley, CEO, Virgin Money. "The Virgin Credit Card established Virgin Money as a key player in the financial services market and created a great platform for Virgin Money to launch further financial products from. We believe the transaction ensures that customers will continue to receive the benefits of a great value credit card with very little disruption to their service."