- Virgin Cash is pulling out of its South African bank card enterprise and handing prospects over to Absa.
- 118,000 bank cards, worth a mixed R750 million, are concerned.
- Absa all the time supplied the back-end for the Virgin-branded playing cards, as nothing got here of Virgin’s one-time ambitions to grow to be a fully-fledged bank in SA.
- Prospects can both get Absa-branded playing cards, or repay credit score balances over time.
- For extra tales go to www.BusinessInsider.co.za.
Richard Branson’s Virgin Cash this week instructed its South African credit score cardholders it’s ditching the cardboard after 12 years within the native market.
This transfer is a part of the corporate’s ambition to be an area fintech chief via Virgin Cash Spot, which is a cashless platform launched in February 2018, a Virgin Cash spokesperson mentioned.
Absa will take over the 118,000 Virgin Cash bank card prospects, which maintain complete credit score of greater than R750 million between them, in keeping with numbers supplied by Cowyk Fox, managing govt for on a regular basis banking at Absa retail and enterprise bank.
That’s down from complete credit score of greater than R1 billion reported by Virgin in 2013.
Absa has 1.5 million credit score cardholders, and the bank has issued them with just below R32 billion in credit score, Fox mentioned.
“Virgin Money did not sell the business to Absa. The core product is owned by Absa which offered the Virgin Money South Africa branded card to customers that have an affinity for the Virgin brand under a brand license agreement,” he mentioned.
Absa supplied the backend assist for the Virgin Cash bank card.
Fox mentioned that there might be no influence on jobs from the closure of the Virgin Cash bank card.
Prospects will now be supplied an equal Absa-branded product, or be given the choice to repay their bank cards additional time if they don’t want to take up an Absa bank card.
“Virgin Cash South Africa is in discussions with the Virgin Group when it comes to how they may conduct that enterprise when the official de-branding takes impact,” Fox mentioned.
Virgin Cash first arrange in South African in 2006 and launched the bank card in 2008.
Virgin Cash beforehand closed down an area insurance coverage enterprise, after its life and short-term insurance coverage providing failed to realize traction.
In 2013, Branson harboured ambitions that the corporate may receive a South African banking licence.
Andre Hugo, Virgin Cash South Africa CEO, declined to reply questions, as a substitute issuing a brief assertion via a public relations firm.
“Absa started communicating with Virgin Money credit card customers on Tuesday, 25 August, and the migration is expected to be complete by the first quarter of 2021,” the assertion learn.
The corporate will deal with its fintech ambitions, which incorporates Virgin Cash Spot, it provides.
In July final 12 months, Hugo instructed Enterprise Insider that Spot has over 400,000 customers, however this week he declined to offer any replace about what number of customers the platform has now.
See additionally | Virgin Cash Spot is taking over Snapscan in South Africa – and it already has 400,000 customers
On Tuesday this week Virgin Cash mentioned in an e mail to its bank card prospects that the choice to can its native bank card had “not been an easy decision, but we believe that it is the right one”.