The Barclays and other non-Lloyds/TSB Bank thread

[WillPS]

This is reminding me of the heady days of the early 2010s when Byres Road in Glasgow had three branches of Santander within about 50m of each other. Looking at Street View, the former Bradford & Bingley was gone by 2012, but the ex-Alliance & Leicester lasted until 2019. (The Abbey branch remains. It was one of the few to get an 'abbey' sign, complete with colour-changing lights).

Did the Alliance & Leicester have those cool colour changing floodlights which illuminated the branch orange then blue when closed?

[cwathen]

I wonder how much of this is Nationwide trying to get a better online banking platform? Their current IT is well in need of an overhaul, whereas much of Virgin Money is quite modern - I have a feeling it's based on Clydesdale's short-lived B brand. That said, I recently opened an ISA with them and it's managed through a separate site, and has a sort code with a Gosforth address - I'm assuming the last vestiges of Northern Rock.

I had a similar thought at first but Virgin Money is a real hodgepodge of systems.

Which actually is also only getting worse. I've had a VM credit card for quite a few years. Saw them remove the website to manage the account in favour only of the app. Didn't really affect me since I was on DD for minimum payment anyway and could still clear the rest of the balance through debit card payments on the app. But that still left them a bit of an outlier and can't name anyone else off the top of my head who can't manage to maintain a website and an app (particularly since they'll just be different frontends to the same system anyway)

But recently it's got worse. Put a few things on the card last month which I wanted to pay off in full this month only to find that I now can't pay debit card through the app as apparently VM can't provide this anymore even though everyone else can. My only options were either an automated phone number or to do a bank transfer to make non-DD payments on the account.

Like seriously, WTF? Can't name any other provider that is pulling off shit like this.

[bilky asko]

Though they have introduced the ability to pay via open banking (a feature available elsewhere for quite a while now) as a replacement.

[WillPS]

But recently it's got worse. Put a few things on the card last month which I wanted to pay off in full this month only to find that I now can't pay debit card through the app as apparently VM can't provide this anymore even though everyone else can. My only options were either an automated phone number or to do a bank transfer to make non-DD payments on the account.

Like seriously, WTF? Can't name any other provider that is pulling off shit like this.

HSBC UK, Natwest, RBS, Ulster Bank and TSB have also stopped supporting debit card payments.

Others are clearly nudging the same way, both Amex and LBG (inc MBNA) have recently changed their UX to hide away debit card payment options behind a load of open banking integrations. Expect those too to disappear in time.

The reason is simple - the interchange fee cap. The maximum Visa or Mastercard can charge on UK credit card spend is 0.3%. Some of that is passed to the card issuer as a commission, presume for the sake of argument that 100% of it is (of course it isn't, otherwise Visa and Mastercard would earn nothing, but go with it).

You've spent £1000 in the UK on your credit card. Virgin Money have made £3 in interchange commission. Wehey, these are the good times right?

Except now you'd like to pay your credit card statement, in full, by debit card. Even with a sweetheart deal with their acquiring bank, there's no way they're going to be able to pay less than £3 to have a £1000 debit card charge processed (the 0.2% interchange alone would be £2 of it). By contrast faster payments will cost them effectively nothing, and Direct Debits little more.

It's actually incredibly hard to make money from straight-forward well managed credit cards nowadays; once you consider the ongoing costs of card issuance, support/back office, technology... basically their only hope is that you don't pay your bill and you end up paying interest.

(Incidentally this is also why credit card providers are so keen to push you toward "on card cashback/offer" portals, because these merchants will be paying a direct commission!)