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Finaccord's report titled Affinity and Partnership Marketing in UK Payment Cards and Consumer Finance represents the most detailed research ever undertaken on this sector and is one of seven studies in the latest series of publications. Drawing on the results of a survey of 2,650 organisations, the report analyses the penetration, operating models and provider share of relationships of affinity and partnership marketing schemes for credit cards, prepaid cards and consumer finance across a range of distributor categories.

These include: airlines; automotive manufacturers; charities; football and rugby clubs; internet, media and telecoms entities; online aggregators and brokers; professional associations; retailers; trade unions; and universities. Moreover, the PartnerBASE database that accompanies the report provides the granular detail behind the analysis, detailing each of close to 500 affinity and partnership marketing initiatives traced by Finaccord in these sectors.

In addition, the latest analysis identifies not only the providers of credit cards, prepaid cards and consumer finance with the most partnerships (overall, and within each category) but, for the first time and using a proprietary formula devised by Finaccord, also computes 'weighted provider shares of partnerships' in order to highlight the providers that are likely to hold the most valuable relationships given the characteristics of their partners.

In this report, credit cards are defined as payment cards with a revolving credit or deferred debit (charge) facility while prepaid cards are classified as payment cards with a reloading function; as such, they exclude gift cards that cannot be reloaded. Consumer finance is defined as including unsecured personal loans plus car finance and leasing contracts, retailer point-of-sale finance and secured loans other than first charge mortgages.

You may be able to use this report and associated PartnerBASE database in one or more of the following ways:

- drill down into the detail lying behind affinity and partnership marketing schemes for credit cards, prepaid cards and consumer finance;

- gain access to research that chronicles the vast majority of affinity and partnership marketing opportunities in these three areas;

- understand not only which providers have secured the most partnerships but which are likely to hold the most valuable deals for each of credit cards, prepaid cards and consumer finance;

- benchmark the competitive position of your own organisation in affinity and partnership marketing and spot opportunities for displacing rivals;

- plan your future affinity and partnership marketing strategy in credit cards, prepaid cards and consumer finance armed with the best market and competitor intelligence available on this subject.

Together, the report and PartnerBASE database will provide you with the definitive guide to current and potential affinity and partnership marketing opportunities in UK payment cards and consumer finance.

Table Of Contents

Affinity and Partnership Marketing in UK Payment Cards and Consumer Finance
TABLE OF CONTENTS

0.0 EXECUTIVE SUMMARY 1

1.0 INTRODUCTION 2

Background 2
Rationale 2
Affinity and partnership marketing remains an important, strategic topic for financial institutions 2
as the ability of affinity and corporate partners to compete effectively has evolved over time 2
Methodology 4
Organisations investigated 4
Finaccord's research covers a total of 2,650 actual and potential partner organisations 4
representing virtually all entities that could be significant in this field 5
Calculation of weighted provider share of partnerships 5
Finaccord's methodology identifies providers that are likely to hold the most valuable relationships 5
by means of formulae that take into account not only UK traffic rankings for organisations' websites 5
but also distribution shares for each financial product or service by organisation category 6
and the total number of organisations in each category that actually distribute the product 6
Definitions 6
Financial products 6
Operating models 6
PartnerBASE syntax 7
Finaccord 7
UK affinity and partnership marketing publications 7
UK consumer research publications 8

2.0 MARKET OVERVIEW 9

Affinities and partnerships in UK payment cards and consumer finance 9
Credit cards 9
Credit card affinity schemes fell in number by almost 12% between 2010 and 2012 9
… although more than 10% of organisations in 11 partner categories still run programs 9
Most affinity schemes are organised in conjunction with a single external card issuer 11
MBNA commands close to a half of all partnerships whether viewed in unweighted or weighted terms 12
with its closest rivals not reaching even 20% of its total number 12
MBNA still holds important credit card relationships with partners across a range of categories 12
MasterCard's portfolio of affinity and co-branded credit cards is likely to perform better than that of Visa 12
Prepaid cards 15
Prepaid cards are most widespread among credit unions and retailers 15
The most popular operating model used by distributors of prepaid cards is the same as that for credit cards 17
15 providers of prepaid cards lay claim to at least one affinity or corporate partnership 18
As a network, MasterCard is ahead of Visa in both the unweighted and weighted analyses 18
Consumer finance 21
Non-internal schemes are most numerous among retailers and automotive manufacturers 21
Where available, consumer finance is most commonly organised via a single, external finance provider 23
lovemoney.com is the only provider that appears in both the unweighted and weighted analyses 24
In unweighted terms, four of the eight leading competitors are specialists in retailer finance 24
Automotive finance specialists are more prominent in the weighted analysis of partnerships 24

3.0 NOT-FOR-PROFIT AFFINITY PARTNERS 26

Charities 26
Introduction 26
The websites of the National Trust and Great Ormond Street Hospital attract the most UK traffic 26
Analysis of partnerships 27
Over a third of charities investigated continue to offer an affinity credit card 27
although just one has any exposure to prepaid cards and none offer consumer loans 29
Professional associations 30
Introduction 30
The combined membership of professional associations comes to just under 4 million 30
Analysis of partnerships 32
AIB's relationship with the Law Society of England and Wales becomes significant in weighted terms 32
Only five professional associations have any arrangement for intermediating consumer finance 34
Sports organisations 36
Introduction 36
This category includes bodies to which individual sports clubs, practitioners and trainers may belong 36
Analysis of partnerships 37
Only three sports organisations are persisting with affinity credit cards 37
and two with consumer finance schemes but none at all with prepaid cards 38
Trade associations 40
Introduction 40
Finaccord has extended its coverage in this category to a total of 700 associations 40
Analysis of partnerships 43
Five trade associations offer an affinity credit card to the employees of their member companies 43
although only one has developed a prepaid card 44
bira bank is the only bank owned by a trade association in the UK 45
Four trade associations have signed up with The Green Deal Finance Company 45
Trade unions 48
Introduction 48
There are around 6.4 million trade union members in the UK 48
Analysis of partnerships 50
The possible launch of a new TUC credit card potentially obviates the need for union-specific credit cards 50
More enthusiasm is visible for prepaid cards but it is still limited to just three trade unions 51
13 trade unions offer consumer finance to their members in one form or another 52
among which seven utilise Autosave Affinity Partners, a specialist in car finance 53
Three other providers with trade union relationships are also car finance specialists 53
Universities 55
Introduction 55
The Open University's website attracts more UK traffic than that of any other UK-based university 55
Analysis of partnerships 56
Only Bank of Ireland offers any competition to MBNA in the affinity credit card sector 56
One university offers car finance to its alumni sourced from five different providers 58

4.0 FINANCIAL PARTNERS 59

Banks 59
Introduction 59
Several challenger banks have emerged to compete with the major incumbents 59
and further structural changes to the market are likely to occur in future years 59
Analysis of partnerships 60
The vast majority of banks offering credit cards issue their own cards on an internal basis 60
Two out of eight banks offering prepaid cards do so in conjunction with an external issuer 62
No banks at all intermediate consumer finance on behalf of external partners 64
Building societies 65
Introduction 65
Mergers and acquisitions have caused the number of extant building society brands to shrink to 54 65
Analysis of partnerships 66
Only two building societies offer credit cards and only one of these does so via a partnership 66
although the rate of provision rises to five out of 54 in the case of prepaid cards 67
Provision of consumer finance in this category is limited to just two building society brands 68
Credit unions 69
Introduction 69
Total membership across around 400 credit unions in the UK now exceeds 1 million 69
with this figure having risen by 170% since 2007 69
The websites of two London-based credit unions pull in the most online visitors from the UK 69
Analysis of partnerships 70
A majority of credit unions investigated offer a prepaid card and not all adhere to the ABCUL product 70
and all offer consumer finance on an internal basis as a core element of their activity 72
Friendly societies 73
Introduction 73
Finaccord's research covers 25 of the larger friendly societies in the UK 73
among which Liverpool Victoria is by far the largest 73
Analysis of partnerships 74
One friendly society offers a lending facility to its customers through a link with a credit union 74
Insurers 75
Introduction 75
Over 70 insurance underwriting brands can be broken down into four main sub-categories 75
Analysis of partnerships 76
although only one of these offers consumer finance and none at all distribute payment cards 76
Online aggregators and brokers 77
Introduction 77
The market for online aggregation and broking has become more concentrated in recent years 77
as a result of a number of factors including the challenge thrown up by cashback websites 77
Analysis of partnerships 78
Some entities in this category have their own search engine but a few outsource to external providers 78
One organisation in this field is unique in having developed a bona fide co-branded prepaid card 80
As with credit cards, lovemoney.com holds important relationships with some of the leading aggregators 82
Specialised lenders 84
Introduction 84
The category of specialised lenders includes a variety of different types of institution 84
with many new competitors having emerged in the wake of the 'credit crunch' 84
Analysis of partnerships 85
One brand classifiable in this category offers a credit card that is issued by MBNA 85
and the only visible prepaid card in this field is also issued by an external partner 86
In contrast, entities in this category offering consumer finance always lend their own money 87

5.0 COMMERCIAL PARTNERS 88

Airlines 88
Introduction 88
18 airlines operating mainly or wholly out of the UK are included in Finaccord's sample 88
Analysis of partnerships 89
Four issuers run competing schemes for credit cards co-branded in conjunction with airlines 89
although only one has developed a prepaid card in partnership with an airline 91
Automotive associations 92
Introduction 92
In addition to the AA and RAC, six other organisations fall within this partner category 92
Analysis of partnerships 93
Three automotive associations continue to run a co-branded credit card scheme 93
although only one, the AA, markets a co-branded prepaid card 95
The Co-operative Bank is the provider for both schemes visible for consumer finance 96
Automotive manufacturers 97
Introduction 97
Among automotive manufacturers, four German brands attract the most UK-based traffic to their websites 97
Analysis of partnerships 98
53 out of 55 automotive manufacturer brands have arranged a scheme for consumer finance 98
among which six utilise FGA Capital as a joint venture provider 98
Nine providers are active in this segment as captive finance firms 100
and eight as independent providers, two of which hold dual status 100
Black Horse holds the most relationships with automotive brands for consumer finance 100
although it is overtaken by six competitors in the weighted analysis of partnerships 100
Coalition loyalty schemes and frequent flyer programs 102
Introduction 102
The websites of four loyalty schemes are ranked in the top 5,000 by number of UK visitors 102
Analysis of partnerships 103
Seven out of 12 loyalty schemes have introduced a co-branded credit card 103
although only one advertises a co-branded prepaid card 105
and one allows members to earn 'currency' by taking out consumer finance 106
Consumer product manufacturers 107
Introduction 107
Some manufacturers of consumer products can act as affinity partners for selected financial products 107
Analysis of partnerships 108
Consumer finance of one sort or another is available through five manufacturer brands 108
Estate agency and property service firms 111
Introduction 111
This category includes prominent online estate agency and property portals as well as traditional chains 111
Analysis of partnerships 112
home.co.uk maintains an online relationship with Moneysupermarket.com for consumer loans 112
Football and rugby clubs 113
Introduction 113
The research investigates a total of 76 professional football and rugby clubs 113
Analysis of partnerships 114
32 football and rugby club affinity credit cards are split unequally across three providers 114
Affinity prepaid cards are yet to gain traction in the football and rugby club sector 116
Zebra Finance is almost entirely dominant when it comes to deals for season ticket finance 117
Internet, media and telecoms entities 119
Introduction 119
This category embraces many organisations with extremely high UK website rankings 119
which can have a substantial impact on the analysis of weighted partnership shares 119
Analysis of partnerships 120
The market segments between co-branded cards and credit card aggregation services 120
with a similar dichotomy apparent in the case of prepaid cards 122
Most organisations in this category that offer consumer finance do so via an external aggregation service 124
Five different providers have won distribution mandates with internet, media and telecoms entities 125
with lovemoney.com and Moneysupermarket.com ranking most highly on a weighted basis 125
Online price comparison providers 127
Introduction 127
PriceRunner and mySupermarket.co.uk run the websites attracting the most UK-based visitors 127
Analysis of partnerships 128
The presence of online price comparison providers has diminished substantially in recent years 128
Retailers 129
Introduction 129
Among retail brands, Amazon's website attracts the most UK traffic, followed by those of Tesco and Argos 129
Analysis of partnerships 130
Over 50 retailer brands make credit cards available in one form or another 130
Argos, Harrods, Sainsbury's and Tesco all utilise a less typical operating model 130
Nine non-captive issuers of credit cards hold at least one partnership with a retailer brand 132
with Santander Cards (UK) laying claim to the most deals among these 132
14 retailer brands issue private label fuel or store cards on an internal basis 132
The card developed by MBNA in partnership with Amazon is most influential in weighted terms 132
Prepaid cards are also more numerous among retailers than in any other partner category reviewed 134
Voucher Express supplies reloadable gift cards to a significant number of retailer brands 134
Close to a quarter of retailer brands have established a scheme for consumer finance 136
Seven providers of consumer finance have garnered four or more distribution partnerships with retailers 137
among which Hitachi Capital, Barclays Partner Finance and IKANO Financial Services hold the most 137
although that with the greatest value in weighted terms is occupied by Nemo Personal Finance 137
Travel companies 139
Introduction 139
The fragmented travel sector hosts a variety of different types of company 139
Analysis of partnerships 140
Co-branded credit cards in the travel sector excluding airlines boil down to just two partnerships 140
rising to five in the case of prepaid cards 142
Utilities companies 144
Introduction 144
Utilities firms have enjoyed considerable success as distributors of home emergency insurance 144
Analysis of partnerships 145
although their involvement in payment cards is limited to a single scheme for a prepaid card 145
Eight utilities companies have signed up with The Green Deal Finance Company 146
The Post Office and other major brands 147
Introduction 147
Several major organisations are considered separately as they do not fit easily in the other categories 147
Among these, the website of the Post Office pulls in the most UK visitors, followed by that of Saga 147
Analysis of partnerships 147
Four of the five organisations covered promote one or more of the products or services investigated 147



LIST OF GRAPHICS / TABLES

0.0 EXECUTIVE SUMMARY 1

1.0 INTRODUCTION 2

The affinity and partnership marketing universe 3
Organisations investigated, segmented by broad category 4

2.0 MARKET OVERVIEW 9

Affinity and partnership marketing schemes for credit cards in the UK: provision rate by category of partner 10
Affinity and partnership marketing schemes for credit cards in the UK: operating models 11
Affinity and partnership marketing schemes for credit cards in the UK: unweighted and weighted provider share of partnerships 13
Affinity and partnership marketing schemes for credit cards in the UK: unweighted and weighted network share of partnerships 14
Affinity and partnership marketing schemes for prepaid cards in the UK: provision rate by category of partner 16
Affinity and partnership marketing schemes for prepaid cards in the UK: operating models 17
Affinity and partnership marketing schemes for prepaid cards in the UK: unweighted and weighted provider share of partnerships 19
Affinity and partnership marketing schemes for prepaid cards in the UK: unweighted and weighted network share of partnerships 20
Affinity and partnership marketing schemes for consumer finance in the UK: provision rate by category of partner 22
Affinity and partnership marketing schemes consumer finance in the UK: operating models 23
Affinity and partnership marketing schemes for consumer finance in the UK: unweighted and weighted provider share of partnerships 25

3.0 NOT-FOR-PROFIT AFFINITY PARTNERS 26

Charities offering credit cards: provision rates and operating models 27
Charities offering credit cards: unweighted and weighted provider share of partnerships 28
Charities offering prepaid cards: provision rates and operating models 29
Top 40 professional associations in the UK ranked by member numbers, 2012 (table) 31
Professional associations offering credit cards: provision rates and operating models 32
Professional associations offering credit cards: unweighted and weighted provider share of partnerships 33
Professional associations offering consumer finance: provision rates and operating models 34
Professional associations offering consumer finance: unweighted and weighted provider share of partnerships 35
Sports organisations offering credit cards: provision rates and operating models 37
Sports organisations offering consumer finance: provision rates and operating models 38
Sports organisations offering consumer finance offering consumer finance: unweighted and weighted provider share of partnerships 39
Top 80 trade associations in the UK ranked by member numbers, 2012 (table) 41
Top 80 trade associations in the UK ranked by member numbers, 2012 (table) (continued) 42
Trade associations offering credit cards: provision rates and operating models 43
Trade associations offering prepaid cards: provision rates and operating models 44
Trade associations offering consumer finance: provision rates and operating models 46
Trade associations offering consumer finance: unweighted and weighted provider share of partnerships 47
Top 40 trade unions in the UK ranked by member numbers, 2012 (table) 49
Trade unions offering credit cards: provision rates and operating models 50
Trade unions offering prepaid cards: provision rates and operating models 51
Trade unions offering consumer finance: provision rates and operating models 52
Trade unions offering consumer finance: unweighted and weighted provider share of partnerships 54
Universities offering credit cards: provision rates and operating models 56
Universities offering credit cards: unweighted and weighted provider share of partnerships 57
Universities offering consumer finance: provision rates and operating models 58

4.0 FINANCIAL PARTNERS 59

Banks offering credit cards: provision rates and operating models 60
Banks offering credit cards: unweighted and weighted provider share of partnerships 61
Banks offering prepaid cards: provision rates and operating models 62
Banks offering prepaid cards: unweighted and weighted provider share of partnerships 63
Banks offering consumer finance: provision rates and operating models 64
Building societies offering credit cards: provision rates and operating models 66
Building societies offering prepaid cards: provision rates and operating models 67
Building societies offering consumer finance: provision rates and operating models 68
Credit unions offering prepaid cards: provision rates and operating models 70
Credit unions offering prepaid cards: unweighted and weighted provider share of partnerships 71
Credit unions offering consumer finance: provision rates and operating models 72
Friendly societies offering consumer finance: provision rates and operating models 74
Insurers offering consumer finance: provision rates and operating models 76
Online aggregators and brokers offering credit cards: provision rates and operating models 78
Online aggregators and brokers offering credit cards: unweighted and weighted provider share of partnerships 79
Online aggregators and brokers offering prepaid cards: provision rates and operating models 80
Online aggregators and brokers offering prepaid cards: unweighted and weighted provider share of partnerships 81
Online aggregators and brokers offering consumer finance: provision rates and operating models 82
Online aggregators and brokers offering consumer finance: unweighted and weighted provider share of partnerships 83
Specialised lenders offering credit cards: provision rates and operating models 85
Specialised lenders offering prepaid cards: provision rates and operating models 86
Specialised lenders offering consumer finance: provision rates and operating models 87

5.0 COMMERCIAL PARTNERS 88

Airlines offering credit cards: provision rates and operating models 89
Airlines offering credit cards: unweighted and weighted provider share of partnerships 90
Airlines offering prepaid cards: provision rates and operating models 91
Automotive associations offering credit cards: provision rates and operating models 93
Automotive associations offering credit cards: unweighted and weighted provider share of partnerships 94
Automotive associations offering prepaid cards: provision rates and operating models 95
Automotive associations offering consumer finance: provision rates and operating models 96
Automotive manufacturers offering consumer finance: provision rates and operating models 99
Automotive manufacturers offering consumer finance: unweighted and weighted provider share of partnerships 101
Coalition loyalty schemes and frequent flyer programs offering credit cards: provision rates and operating models 103
Coalition loyalty schemes and frequent flyer programs offering credit cards: unweighted and weighted provider share of partnerships 104
Coalition loyalty schemes and frequent flyer programs offering prepaid cards: provision rates and operating models 105
Coalition loyalty schemes and frequent flyer programs offering consumer finance: provision rates and operating models 106
Consumer product manufacturers offering consumer finance: provision rates and operating models 109
Consumer product manufacturers offering consumer finance: unweighted and weighted provider share of partnerships 110
Estate agency and property service firms offering consumer finance: provision rates and operating models 112
Football and rugby clubs offering credit cards: provision rates and operating models 114
Football and rugby clubs offering credit cards: unweighted and weighted provider share of partnerships 115
Football and rugby clubs offering prepaid cards: provision rates and operating models 116
Football and rugby clubs offering consumer finance: provision rates and operating models 117
Football and rugby clubs offering consumer finance: unweighted and weighted provider share of partnerships 118
Internet, media and telecoms entities offering credit cards: provision rates and operating models 120
Internet, media and telecoms entities offering credit cards: unweighted and weighted provider share of partnerships 121
Internet, media and telecoms entities offering prepaid cards: provision rates and operating models 122
Internet, media and telecoms entities offering prepaid cards: unweighted and weighted provider share of partnerships 123
Internet, media and telecoms entities offering consumer finance: provision rates and operating models 124
Internet, media and telecoms entities offering consumer finance: unweighted and weighted provider share of partnerships 126
Online price comparison providers offering credit cards and consumer finance: provision rates and operating models 128
Retailers offering credit cards: provision rates and operating models 131
Retailers offering credit cards: unweighted and weighted provider share of partnerships 133
Retailers offering prepaid cards: provision rates and operating models 134
Retailers offering prepaid cards: unweighted and weighted provider share of partnerships 135
Retailers offering consumer finance: provision rates and operating models 136
Retailers offering consumer finance: unweighted and weighted provider share of partnerships 138
Travel companies offering credit cards: provision rates and operating models 140
Travel companies offering credit cards: unweighted and weighted provider share of partnerships 141
Travel companies offering prepaid cards: provision rates and operating models 142
Travel companies offering prepaid cards: unweighted and weighted provider share of partnerships 143
Utilities companies offering prepaid cards: provision rates and operating models 145
Utilities companies offering consumer finance: provision rates and operating models 146
Partnerships of the Post Office and other major brands offering credit cards, prepaid cards and consumer finance 148

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