An American in Edinburgh: RBS Advanta's John Mullady Introduces the First U.S. Credit Card in Scotland

By Lunt, Penny | ABA Banking Journal, May 1996 | Go to article overview

An American in Edinburgh: RBS Advanta's John Mullady Introduces the First U.S. Credit Card in Scotland


Lunt, Penny, ABA Banking Journal


John F. Mullady grew up in New York City, spent most of his working life there, and has seen Phantom of the Opera 17 times. But he's quite happy to be transplanted temporarily to Edinburgh, Scotland, to show the Brits credit card marketing the likes of which they've never seen before.

Mullady, former chief operating officer of First Omni Bank, is managing director of PBS Advanta, the joint venture of Royal Bank of Scotland and Advanta, the Horsham, Pa.-based credit card company. (The bank owns 51% and Advanta owns 49%. First Data Resources is the processor.) The two companies are trying to capitalize on the Scots' reputation for being "mean with money," and therefore good bankers, and the Americans' reputation for friendly service to provide credit cards to people in Scotland, England, and Ireland.

As the American market was becoming increasingly saturated and the U.K. economy was on the rebound, this year seemed a good time to enter this market. There are only about ten major card issuers in the U.K., the largest being Barclay's with 30% market share.

On February 14, RBS Advanta launched its first credit card, a Visa card with an APR of 15.9% (the U.K. clearing banks' base lending rate plus 8.63%) and no annual fee. The typical U.K. credit card has a 22% APR.

Card marketer's dream

Mullady has been studying cardholder behavior in the U.K. for about a year and a half. While the British don't usually like to borrow and they have been heavy users of debit cards, other trends work in RBS Advanta's favor. For example, between 1990 and 1991 the number of new credit cards issued in the U.K. fell by over three million because major issuers introduced annual fees, so there's strong opportunity for a no-fee card. In a survey, 48% of consumers said they would accept a card with a lower rate than the one they had. They haven't been offered too many lower rate cards. There's little direct marketing in the U.K.

That should change as RBS Advanta continues its massive direct mail campaigns, the first waves of which have already attracted many times the usual response in the U.S. While Americans throw away more than 99% of the card offers in their mailbox, people in the U.K. actually read their mail.

Mullady and his staff of 24 examine marketing databases for indicators that people will or won't respond to particular mailings. …

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