For the first time in Israel, a retail chain is about to enter the credit card field. Sources inform "Globes" that the Blue Square Israel (NYSE: BSI) retail chain is about to commence cooperation with the Leumi Card credit card company, owned by Bank Leumi. The companies will jointly issue a credit card and establish a new customers club, which will apparently be called Blue.
Following the establishment of the new club, the Buy-and-Bonus club, jointly owned by Blue Square and ICC-Cal, will probably be shut down. Buy-and-Bonus has one million members, of whom 80,000 have the club's credit card, issued by ICC-Cal. Blue Square is not a party to issuing this card.
Blue Square's entry into the credit card field will enable it to benefit from the financial profits derived from issuing the cards and to share in the revenue from commissions on bank transactions and profits from the credit granted to card holders.
Blue Square CEO Yoram Dar confirmed that the chain planned to enter the financial field soon through a partnership in a credit card company, but declined to specify the name of the company. According to Dar, Blue Square plans to build a platform that will enable it to issue cards for the first time. Dar denied, however, that the chain planned to close down the Buy-and-Bonus Club, noting that no decision had yet been made on the matter.
Bank Leumi executive VP and head of marketing and strategic development and Leumi Card chairman Yona Fogel declined to respond to the report.
Published by Israel's Business Arena on January 3, 2002