Magazine article American Banker

Despite Protests, Citi Rolls out Cobranded Card with German Railway

Magazine article American Banker

Despite Protests, Citi Rolls out Cobranded Card with German Railway

Article excerpt

Citibank in Germany is right on schedule in launching a cobranded payment card with the Deutsche Bahn, the state-owned railway system.

But the big bank card issuer did not expect to collide with consumer activists in Germany, who are accusing Citibank of using underhanded methods to attract cardholders, according to The Wall Street Journal.

This month Citibank Privatkunden AG, the German consumer banking unit, began targeting the three million customers of Deutsche Bahn through direct mail, as it had pledged last year.

The letters invite Bahn users to apply for a new rail pass, but instead of a simple pass, Citibank is offering one that combines a personal photograph on the card with a Visa credit or debit service.

The debit version, an on-line Visa Electron product that is linked to a checking account, is being marketed as an alternative for people who do not want a credit card, or for people who do not qualify for credit.

Because credit cards are not popular in much of Europe, it is likely that many customers will not choose the credit card option.

Consumer groups claim Citibank's applications do not clarify that rail customers can also get a new Bahn card without a financial-payment feature.

Bahn riders over 18 who simply want to use the pass for train travel will receive an Electron card, but the debit function can remain dormant if cardholders don't supply Citibank with the relevant information about their bank accounts, or if they elect not to open such accounts.

People under age 18 get an upgraded Bahn card with a photograph and still qualify for the 50% discount on rail travel that is a standard feature of the basic Deutsche Bahn pass. …

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