Barclays 2013 Annual Report Download - page 33

Contributing to income by
We charge for our products and services,
contributing to Group revenue through:
 Interest income from consumers and
businesses opting to use the credit we
offer
 Transaction fees from facilitating the
payment flow, both from consumers
making payments and from businesses
accepting payments
 Service fees from value-added features
for consumers and businesses, such as
monthly fees for point of sale terminals
or the fee for transferring an outstanding
credit card balance from another card
Sustaining business by
Society’s underlying need to make and
take payments won’t change – and seems
likely to increase as more sophisticated
electronic and digital solutions are required
by customers.
Our role is to support and facilitate the
ways that people wish to make and take
payments – while ensuring we lend
responsibly to those that credit is suitable
for.
Because of our role as a trusted
international payments company and by
responding to customer and market needs,
Barclaycard has maintained its position as
the 8th largest consumer payment
company in the world.
Contributing to strategy
Barclaycard operates in the fast-growing consumer payments industry, with clear growth opportunities. Providing our
customers with solutions that are simple, offer clear value, always work, increasingly digital and instant and create
emotional engagement will enable us to become the ‘Go-To’ bank for consumer payments.
Balanced Scorecard
Helping people
achieve their
ambitions in the
right way
Customer and client
Barclaycard serves 35.5m customers, an 8% increase on prior year and
350k business clients, an 11% increase. We have focused on offering
customers simple, innovative products as part of our objective of
moving from satisfied customers to customers who are strong
advocates of our business. We have implemented Net Promoter Score®
as our key customer metric to measure this.
We have continued to build on a heritage of innovation, supporting
more than 1m payments enabled devices across three continents and
working with Transport for London on acceptance of contactless cards
for over 6.5m bus journeys in the UK. We have launched bFlex, a
revolutionary, flexible finance product designed for online purchases.
Our tailored offers engine for UK customers, ‘bespoke’, has reached
over 800k registered users, of whom over half are new to Barclays.
We have also worked with other areas of Barclays to better serve our
customers, such as through the ‘Better Together’ initiative, which
combines current accounts and Barclaycard Freedom Rewards to
provide customers with access to credit and the launch of Absa Pebble,
Africa’s first mobile payment acceptance device.
Barclaycard operates in the fast-growing consumer
payments space, supporting buyers and sellers by
enabling consumers and businesses to make and take
payments. We provide the ability for consumers and
businesses to fund these payments with credit.
Market and Operating environment
The consumer payments sector is growing rapidly as a result of
changing customer behaviour, based on the growth of electronic and
mobile commerce and changing payment preferences as key factors.
New technology, competition and regulations all present opportunities,
but also the need to adjust our business model. Our customers and
clients want us to do more for them, and to do it better, faster and
cheaper, and digitally. This presents many opportunities for Barclaycard
and also presents challenges.
Business Model risks
This changing marketplace could create risks to the Barclaycard
business model. The emerging competitive landscape in consumer
payments is seeing new players enter the payment value chain, and
new use of technology generating the need for continuous innovation
and technology investment. Our unique ability of supporting both
buyers and sellers, diverse distribution channels, and the scale of our
business in multiple countries helps to mitigate the impact of this risk.
Other potential risks come from macroeconomic headwinds creating
further credit risk for our customers and reducing income though
potential margin compression, impacts of further regulatory change or
increased operational risk. Our diversified business model and
commitment to leading standards for business practice should help
limit the potential impact from these.
Bring diverse benefits…
 Generating revenue streams from both
parts of the relationship
 Appeal to those who seek ‘all-in-one’
banking relationships as well as those who
prefer discrete propositions
 Improved services and customer insights
 Faster innovation at lower risk
 Access to diverse distribution channels
 Attractive growth potential
 Lower costs
 Lower risks from world class analytics
 Higher returns
 Greater resilience to economic cycles due
to operating in multiple geographies and
supporting both sides of consumer
payments
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