Citigroup, the US multinational investment bank and financial services corporation headquartered in New York, won the rights to offer a pair of new credit cards with online furniture seller Wayfair, beating its rival Alliance Data Systems as informed by CNBC.
The deal comes amidst tough game-changing times as the COVID-19 pandemic is redefining working culture across the globe and people are shifting gears towards work- from- home norms.
Wayfair, the US e-commerce company that sells furniture and home-goods, say an 84 percent jump in its second-quarter sales and turned a profit for the first time since going public in 2014. The stock is on a roll and has seen a steep growth of 192% this year.
The new offering includes a store card that works only at Wayfair and its affiliated brands, and a co-branded card that works anywhere Mastercard is accepted, as reported by Citigroup. Co-branding is a unique way of offering not only good deals but also giving the banks quick access to consumer spending at popular retailers. In this particular arrangement, they both offer 5% in rewards on eligible Wayfair purchases and have a variable APR of 26.99%.
Last year Goldman Sachs used this methodology with the privy access to offer the Apple Card which helped it make inroads into its new consumer finance business.
Citigroup, which took control of the Costco card from AmEx in 2016, similarly displaced Columbus, Ohio-based Alliance Data, a major provider of private-label cards that had previously offered a Wayfair card, according to reliable sources.
Online business has grown by leaps and bounds in the last four months due to social distancing and lockdowns worldwide and the users of Citigroup retail cards jumped almost 30% this year versus 2019, commented Citigroup spokeswoman Jennifer Bombardier.
The head of Citigroup’s retail services business Craig Vallorano, added, “As retail continues to move online, we are thrilled to partner with Wayfair to provide customers with seamless, convenient financing.”
Adding the icing on the cake is the fact that this co-branded card also earns 3% at grocery stores, 2% on online purchases, and 1% on all other transactions. Furthermore, customers can use the cards for no-interest financing if paid in full up for to 24 months on qualifying purchases or for major purchase plans, which come with a 9.99% APR for up to 60 months.