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Search jobs to launch credit card

BREAKING NEWS: Ahead of Virgin's official entry into the financial market next Monday, low-fare airline today, Wednesday 21 June, 2006, announced its first foray into the financial services sector with the launch of a kulula-branded VISA credit card, centred around an innovative rewards programme, issued under license of FirstRand Bank, and managed by division FNB.

The kulula credit card, still subject to regulatory approval, will be officially launched to the public within the next few months and card will offer cash back for every rand spent, to be used for flights on

Gidon Novick, executive director of kulula, says, "kulula's reward programme will significantly exceed the traditional reward offerings and we expect it to cause a real shake-up in the market, particularly as the ease of use of our reward programme will be unmatched.

"The average reward programme for credit cards linked to frequent flyer programmes is currently less than 1% back to the card-holder in miles or points. Furthermore, frequent flyers often can't book the flights they want even when they have these points and have to wait ages to accumulate the required number of miles to enjoy a discounted flight."

"We see good potential to increase the number of consumers using credit cards in South Africa, particularly when the card is linked to a great rewards programme and a highly competitive and innovative interest rate proposition. We also expect the uptake of the card to be high among consumers who already use a credit card each month and have an interest in travel."

Head and shoulders above the rest

Novick says that once kulula had conceived the idea, it had considered all the major banks to underwrite it, but that FNB had come out head and shoulders above the rest in terms of its proactiveness, innovation and approach to the concept.

"We are thrilled that our credit card will be managed and operated by FNB," said Novick, "especially since they have the same approach as we do in terms of ease and giving real benefits to customers. Their solid track record and expertise in the financial services arena have been crucial for the success of this product. The international acceptance of Visa was also an important factor in our decision."

According to the kulula, which has been operating for nearly five years, the airline is already South Africa's biggest online retailer with internet sales of some R3.5 million per day. This is the first time, however, that an airline in South Africa has offered its own credit card linked to a rewards programme, although the trend has already taken off in international markets such as the UK and USA where many popular brands have their own credit cards.

Loyal customer base

"When people trust and enjoy dealing with a brand, in this case a truly South African-built brand, they become attached to it - as we have already seen with our kulula fans. We have therefore already established a loyal customer base and we believe these customers, as well as other consumers, will feel comfortable using us for their personal finances as well as their air travel. However, the backing of a credible partner in FNB is an important part of creating this trust," adds Novick.

Jan Kleynhans, CEO of FNB Card Division, comments that it is exciting to be working with an innovative brand like kulula and through a first-of-its-kind credit card, to make flying more accessible to South Africans.

"Credit cards are very much a commodity in South Africa and around the world, but this product offers a distinctive difference by giving back real benefits to consumers in terms of access to affordable flights. We are pleased to be able to offer our expertise and financial services infrastructure to kulula to roll out this product.

"Obviously one needs to be responsible about awarding credit to consumers, particularly with the recent increase in interest rates. We will only offer cards to credit-worthy customers and will encourage South Africans to practice responsible use of credit," says Kleynhans.

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