Your Money: After savings cards in shops, it's shopping sites in banks

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The Independent Online
The revenge of the banks is under way. They are taking on the retailers at their own game.

Moves by non-financial firms into financial services have been trumpeted loudly, whether it be Richard Branson's Virgin Direct, Marks and Spencer or the big supermarkets. Sainsbury's, which last week launched its Reward loyalty card offering discounts and air miles to shoppers, may follow up with a payment card and other financial products. Tesco's interest- bearing Clubcard Plus became available last week, and shoppers in Somerfield and Gateway supermarkets can pick up information on Somerfield's forthcoming share issue.

But now the banks are turning themselves into part-time retailers - selling non-financial products and services, running shops on the Internet, and issuing loyalty cards.

From next month Car Shop UK, a partnership between Barclays and the satellite TV broadcaster BSkyB, will offer an international car-hire booking service that guarantees a minimum level of service and a maximum price. The service will be available via BarclaySquare, the bank's Internet home- shopping page, or by phone or fax. Enquiries and bookings will also be possible through Sky TV's interactive teletext service, Intertext. The big TV manufacturers are developing interactive sets that are expected to be generally available by the year 2000, giving viewers access to home shopping and home banking.

The car-hire booking service is an extension of Car Shop UK's brokerage for buying and selling used cars. For the past year this has been available on Sky TV. Car Shop is free to use for the buyer, apart from the cost of a local-rate call, and the seller pays 99p a day for the display advertisement, subject to a minimum fee of pounds 13.86.

Since last year another of Barclays' associated companies, Cars Direct, has been using the organisation's bulk-buying strength to offer new cars direct to the public by phone at highly competitive prices. Customers may also raise finance through Barclays.

In a few months' time, Cars Direct is also likely to become available through BarclaySquare, adding to the 300,000 visitors with sales "in the thousands" that the site has attracted in its first year, according to Barclays. Software, computers, CDs, books and videos are thought to have proved popular purchases, and Barclays says it is looking for more retailers to join the site.

Earlier this month NatWest launched its alternative. Buckingham Gate is an up-market virtual shopping mall, targeted at Anglophiles interested in high-quality, high-price goods. Outlets on the mall are the private bank Coutts, Austin Reed, Church's Shoes and TM Lewin, quality tailors. To attract more "cybertourists", the site includes details of gallery exhibitions (and items for sale) and high-profile British events such as Wimbledon.

Purchases can be made through the Buckingham Gate Internet site, and NatWest says it has set up a secure encrypted system that accepts payments by sterling, US dollars or Japanese yen on credit or debit cards. Sales are accepted from anywhere in the world.

Points-based loyalty schemes on credit cards are well established. However, the TSB has gone one step further: it offers points that provide discounts on a range of products, and these are tied not only to credit and debit card spending, but also to mortgages, savings and current accounts, and insurance policies.

The discounts include up to 50 per cent off a range of holidays, up to 15 per cent off carpet from Allied Carpets, and up to 30 per cent off goods from Argos.

Some banks and building societies believe the branch of the future should sell the widest possible range of goods. Paul Feldman, head of management services at Nationwide, says the building society would be happy to sell a wide range of products from kiosks in its branches - but in partnership with existing retailers, which are reluctant to co-operate at the moment. "It's about what people will let us sell," he says.

q Contacts: Car Shop UK, tel 0345 226336; page 502, Intertext on Sky TV. Cars Direct, tel 0800 121416. BarclaySquare, Internet site, barclaysquare. Buckingham Gate, Internet site,