Avantcard to acquire Tesco’s Irish credit card portfolio
UK grocer makes final exit from Irish financial services market
Tesco Bank customer accounts will migrate to the Avantcard platform by this autumn, pending regulatory approval.
Avantcard, the Spanish consumer finance business, is to acquire Tesco’s Irish credit card portfolio, consisting of some 27,000 customer accounts, for an undisclosed sum.
The move follows a decision from the UK supermarket last May to stop accepting applications from Irish customers for its credit card services, and may be Brexit related.
In a statement, Avantcard said that existing Tesco Bank customer accounts would be migrated to the Avantcard platform by this autumn, pending regulatory approval. Tesco credit card users can continue to use their cards until a new card is issued to them, and will be able to continue to accumulate Tesco Clubcard points with their new credit card, at the same rate of 1 point for every € 2 spent in Tesco and 1 point for every € 8 spent elsewhere.
Avantcard charges an APR of 22.9 per cent on purchases, or 19.9 per cent on withdrawals, and a zero per cent introductory offer on balance transfers for six months.
Chris Paul, managing director of Avantcard said: “Avantcard’s strategy is to be a leading consumer finance provider in Ireland by 2020, and this will be achieved through ongoing product innovation, continuing investment and strategic partnerships. We look forward to welcoming Tesco Bank’s customers to Avantcard, where we have an award winning team dedicated to service excellence and delivering customer focused, best in class, consumer finance products”.
The departure of Tesco means that Irish consumers now have just six credit card providers to choose from, and means the Irish consumer market for financial services continues to shrink.
Avantcard first came to Ireland when it acquired the Carrick-on-Shannon based MBNA in 2012. It re-launched its business in 2017, moving into personal loans and linking up with Chill Money, which acts as issuer and servicer for its loans and credit cards. Avantcard employs approximately 200 people in Co Leitrim and Dublin.
Last May Tesco said it would stop accepting applications from new customers for its credit card service. In 2014 the grocer shut its car, home and pet insurance offerings to new customers in the Irish market, leaving the credit card as its sole financial services product in the market.
The grocery group, which operates an extensive financial services arm in the UK, said the decision was made “following a review of Tesco Bank’s operations in the Republic of Ireland”.
The UK’s imminent departure from the European Union could be a factor in this decision. Tesco Bank is authorised in the UK, and operates in Ireland on a cross-Border basis under European Union passporting rules. Once the UK departs the EU, these rules will no longer apply, which would mean that the grocer would have to apply for a full licence in Ireland.