JP Morgan plots new UK credit card in challenge to Barclaycard
America’s biggest bank JP Morgan is plotting a new credit card for UK consumers in a looming challenge to Barclaycard.
The lending giant is doing internal tests on a new credit card, which it has been planning for more than a year as part of its strategy to ramp up business in the UK, according to Bloomberg.
It will be the latest expansion for the bank’s UK retail arm Chase, which JP Morgan launched three years ago and has rapidly become one of the biggest digital banks in the country.
In the last year, the amount of money deposited by customers at Chase has surged from £15bn to £20bn, more than digital rivals Monzo, Revolut and Starling.
The UK division is on track to become profitable in 2025 and the bank has already far exceeded bosses’ expectations. Initially, executives did not expect to break even for the first five years.
Becoming a UK credit card provider means Chase will soon be taking on major high street banks such as Barclays, which is the UK’s biggest credit card provider with Barclaycard.
In the US, JP Morgan has a wide range of credit cards that include its Chase Sapphire Reserve, which offers high-end rewards on travel and restaurants.
Its initial UK offering will be a more basic credit card, but it plans to roll out a wider range of options further down the line.
‘We will expand into Europe’
JP Morgan’s US consumer bank has more than $1trillion (£800bn) in deposits, making it the biggest bank in America, as well as being the world’s largest credit card issuer, with more than $200bn in outstanding loans.
JP Morgan, which has been led by chief executive Jamie Dimon for nearly two decades, also has a major UK retail presence through its digital wealth-manager app Nutmeg, which is the largest investment platform in the UK, with more than 200,000 customers.
Unlike in the US, where JP Morgan has nearly 5,000 bank branches, the lender’s UK presence is online only and uses costly offers such as cash-back deals on debit cards and 3.85pc rates on savings accounts to ramp up its customer base.
But recently, Chase has tightened access to perks by increasing the amount of money customers need to deposit to access rewards.
Daniel Pinto, JP Morgan’s president, told investors at a conference this month: “We are not going to have branches or anything like that. It’s all digital”.
He added: “And at some point, we will expand into the rest of Europe.”
JP Morgan declined to comment.