Foreign banks, travel firms card tie-ups fall through

Co-branded and multi-branded credit cards have become hotties for banks, but similar ventures with travel companies have not found favour with the banks.

Major foreign banks, such as Citibank, Standard Chartered and HSBC, have discontinued their co-branded travel cards. Citibank and

Standard Chartered had a co-branded card with Thomas Cook.

The country's largest private sector bank, ICICI bank is also not open to the option. The reason being cited is that a typical Indian traveller does not remain loyal to a single travel company.

Nicholas Winsor, head - personal financial services, HSBC, said, "The key driver for such tie-ups is a compelling proposition which will force the customer to remain loyal to the card. A couple of years back, HSBC also had a similar tie-up with a travel company, which has been discontinued."

Citibank also followed suit, which parted ways with Thomas Cook recently. One of the reasons for the co-branded card not being popular was availability of personal loans at much lower rates.

ICICI Bank's joint general manager B Madhivanan pointed out, "A typical Indian traveller follows a bargaining behavioural pattern by talking to various travel companies. Typically, they are not loyal to a single travel company."

He also attributed such fallouts to the fragmentation in the travel industry. Standard Chartered Bank discontinued its relationship with Thomas Cook as the customer was not gaining much from the tie-up.

The co-branded cards issued have been replaced with StanChart's vanilla credit cards.

Neeraj Swaroop, CEO India, Standard Chartered Bank, "The market is still at a nascent stage and will recover only with a transition in people's lifestyle and way of thinking. Domestic travellers are not yet accustomed to planning trips on credit."

Even as co-branded cards with travel companies have fallen through, various banks have tied up with travel companies to offer discounts for their respective credit card customers.

For instance, SOTC has a tie-up with Kotak Mahindra Bank and Cox and Kings has a similar arrangement with UTI Bank and Citibank.