Tesco launches current account

Out-Law News | 10 Jun 2014 | 12:38 pm | 1 min. read

Retail giant Tesco has launched its first ever current account as it bids to gain a further foothold in the financial services market.

Tesco said its current account customers will be able to manage their accounts online and through a mobile app and that they'll be able to gain reward points when making payments with a linked debit card both in and out of Tesco stores.

Customers will also be able to make deposits at some of its UK stores, it said.

"In designing our current account we have listened to more than 20,000 customers to understand what they want," Benny Higgins, Tesco Bank's chief executive, said. "The account we are launching today offers all the features they told us mattered most. There are no gimmicks; just a simple, rewarding, modern, convenient current account, designed for Tesco customers, by Tesco customers."

Tesco Bank already offers a number of banking and insurance products.

The company has entered a competitive current account market where traditional banks are facing increasing competition for customers from the retail sector as a result of advancements in technology and the increasing convergence of markets. Marks and Spencer launched a current account offering earlier this year.

However, the government has previously expressed concern at the lack of willingness on the part of current account users to switch providers and about the barriers that have existed to switching.

To address those concerns, a number of UK banks and building societies launched a new standardised switching service last September that allows current account holders to switch more easily between providers of those accounts. The service offers a guarantee to users that they will not face any charges or interest on their old or new accounts due to failings in the switching process if they inform their new current account provider of such mistakes. 

In its statement, Tesco said that Tesco Bank has signed up to offer the current account switching service.