Woolworths will be launching its own credit card on September 1st. Its partners are HSBC and Master Card. Woolworths Everyday Money credit card will allow customers to earn shopping cards, which can be redeemed at the group’s retail outlets - Woolies supermarkets, Liquor Land, Big W, Tandy and Dick Smith.

The retail gaint has made no secret of its plans to move into the financial services industry in a big way. In UK the supermarkets have shaped themselves into ‘mini banks’.

They offer credit cards, insurance, loans etc - ‘Supermarket Banking’ is becoming huge over there. It makes sense though. Supermarkets have the following advantages over the banks:

1. Already have a huge customer base.
2. Even though shoppers might have no intention of signing up for a new credit card, everytime they shop there they are still exposed to the credit card. The same goes for other financial produstc as well. This constant exposure might actually persuade them to sign up for the credit cards/products.

We make more trips to supermarkets than to banks. Imagine a customer service office at Woolies explaining how we can save money with their new card or new insurance product. Sounds good doesn’t it…Whether we should sign up or not is another thing - atleast they have the huge advantage of being able to market their products to us.

From consumer point of a view, we need to be careful. I plan to do a review of the card once Woolworths publishes more details. I am also keen to find out if there would be any link with the Every Day Rewards Card. Overseas supermarkets’ financial products are very competitive. Their increasing market share is making the banks take notice of them. I would love a similar situation here. I love competition (especially when banks are involved)

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