UK’s Virgin Money plans to jump into the buy now pay later (BNPL) market, as it builds a digital wallet in collaboration with Global Payments.
Leading financial services group in UK, Virgin Money plans to launch a digital wallet in partnership with Global Payments by the second half of the year.
Virgin Money will provide seamless buy now pay later (BNPL) services and the digital wallet will carry a range of customer products and services.
Plan to close some traditional branches
The bank is expanding its foothold into the digital sector and will be closing 31 branches across Scotland and North of England early this year. The closure of branches is expected to result in 112 layoffs.
David Duffy, group CEO announced the move to get into the BNPL world, as the merged Clydesdale and Yorkshire trade unions and Virgin Money look forward to a return to profits for the financial year 2021. This is part of Virgin Money’s emerging digital payments strategy and the wallet is a core element of its strategic alliance.
With the use of open banking application programming interfaces (APIs), the new digital wallet will become available to any consumer or business in the country. This strategy will lead to cost savings of GBP175 million ($237.6 million) over the next three years, and 50% of the savings will be reinvested into the business.
“Our accelerated digital strategy will result in new propositions, including a digital wallet and will deliver efficiency and agility improvements. The combination of these factors will help us become a growth-oriented digital bank that provides the best-in-class experience and unique loyalty rewards for customers and delivers double-digit returns for shareholders,” Duffy said.
This digital wallet provides a compelling customer proposition in the UK, providing Virgin Money’s broader suite of products especially embedding the Virgin Red, Virgin Group’s rewards programme that allows customers to earn and spend Virgin points through the wallet. It will also connect Virgin Money’s growing Business Bank.
Duffy said, “Our branded digital wallet will bring to life the benefits of Virgin Money’s customer offer. By fully integrating the Virgin Red rewards club alongside our broader suite of products and services, we can create compelling value for both customers and the bank”.
He added that “Expanding our partnership with Global Payments enables us to bring together all of our credit and debit cards onto a single platform. Working together to leverage expertise across the payments ecosystem, combined with our focus on customer experience and one of the world’s most recognised brands, gives us the opportunity to build new digital payment propositions to enhance the experience of our millions of personal and business customers, as we continue to disrupt the status quo in UK banking”.
Bring digital solutions to customers
Global Payments CEO Jeff Sloan said, “We have a unique advantage of combining both sides of the payments ecosystem, coupling our merchant and issuing capabilities to deliver the next generation of digital commerce to our clients”.
“Together with Virgin Money, we are building one of the best-in-class digital solutions to provide exceptional, frictionless experiences for Virgin Money’s customers and merchants,” he said.
With this new partnership, Virgin Money will be able to access consumer-centric data across its businesses, gaining better insights about the buying patterns of customers and the latest trends so that it can launch new products and services that directly address consumers’ needs and improve the consumer experience.
Global Payments will expand its relationship with Virgin Money through its TSYS Issuer Solutions segment. This will create a single merged platform and will add Virgin Money’s debit businesses to its current credit solutions under a new agreement.
Virgin Money partnered with Microsoft’s financial service-specific cloud to simplify the bank’s IT infrastructure and create a supple platform for the creation of new businesses and customer-centric products.