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Avoid being hit by the Government’s credit card surcharge ban with Cheaper Pay!

As of January 2018, businesses will be stripped of their ability to add any surcharges to their card transactions.

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Cheaper Pay’s industry-leading payment solutions come in at a staggering 40% cheaper price than the likes of WorldPay, Barclays and Lloyds – offering terrific value for money, as well as bearing the costs that may be lost in profit once these government changes come in to fruition next year.

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50 years on: How credit cards changed our relationship with money

Fifty years ago this week Barclaycard issued the first credit cards in the UK.

Half a century on, consumers are used to a range of convenient ways to pay, but back in 1966 there was a feeling of change when people tried to brandish their exciting new plastic cards.

“When it arrived I didn’t really know what it was,” admits Liz Hodgkinson, who was a fresh-faced 22-year-old just out of university.

The company sent out some 1.25 million plastic cards to Barclays customers from 29 June 1966 and while some sent them back or never used them, many, like Liz, a writer, embraced the new way of paying.

“There was an explanatory letter from Barclays which said it was issuing the cards to its best customers. It was a terrific revolution as far as women were concerned as previously you had to have a male guarantor to get credit.”

Liz Hodgkinson in 1966 and today

Liz Hodgkinson in 1966 and today

At the time, the bank said: “[Barclaycard’s] purpose is to reduce the use of cash in shopping and other transactions and the scheme is designed to appeal not only to those who must travel and spend a good deal of money in restaurants, but also to the everyday shopper throughout the country.”

It also stressed the benefits to retailers and businesses by pointing out that the card would help in “reducing or eliminating the book-keeping now needed to maintain customers’ credit accounts.”

‘Made me feel special’

Once she’d worked out its advantages, Liz used her card as soon as possible.

“I realised that I could buy something without having to pay for it there and then and could have three weeks’ grace. It meant I didn’t have to wait until payday.

“It made me feel very special. My husband banked at Lloyds at the time so didn’t get one.”

In fact it took Barclays’ High Street rivals six years to respond.

Then and now

By the time a group comprising Lloyds, NatWest and Midland (now HSBC) launched the now-scrapped Access card in 1972, there were 1.7 million Barclaycard holders.

Today the company says it has 10.5 million consumer customers as well as many more business customers.

Graphic showing key stats of 50 year anniversary

In the intervening period, the world of plastic cards has changed completely.

In 1966 Barclaycard charged an annual interest rate of 1.5% but expected payment by the end of the month.

The idea of revolving credit, where a card can be used to maintain a longer borrowing, only started in 1967 when Barclaycard offered up to three months’ credit. Now, of course, it’s possible to be in debt to a credit card for a lifetime and the average interest charged on outstanding balances is 18.9%.

The borrowing limits in 1966 were much more modest, too. Cardholders were offered up to £100 worth of credit. Now the average is around £4,000, the company says.

Looking ahead, plastic cards will take over from cash to become the UK’s most frequently used payment method by 2021, reckons Payment UK.

The growth will be driven by “the next generation of account holders”, says the UK Cards Association as “younger people are more likely to embrace new technologies such as contactless cards and mobile payments.”

Barclaycard being sold in 1966

Paying on plastic has come a long way since 1966, with the introduction of debit cards and contactless payment

But the older generation is getting in on the act, too. Liz Hodgkinson, now 72, reveals: “I have an app on my phone to make contactless payments,” although she admits: “It was set up by my grandson!”

Debt warnings

While the introduction of plastic in 1966 may have given cardholders like Liz a feeling of confidence, the evolution of the credit card also meant the danger of getting into debt very much became a reality.

“I was elated to get an Access card when I was aged 18,” says Karen Wake, 55, a pension expert. But her happiness didn’t last. “By the age of 25 I had built up £30,000 worth of debt.

“I worked hard to pay it off in five to six years and have had no debt since then,” she says. “Despite the fact I now work in the financial services industry, that didn’t equip me to manage my finances at a young age.”

Today, many people happily use credit cards for convenience – often earning rewards or cashback – while paying the balance off every month to ensure there are no charges.

But overspending and building up long-term debt remain big problems.

Mike O’Connor, chief executive of the debt charity Step Change, says: “The average credit card debt we see is £8,403 and last year we dealt with more than 200,000 people with £1.7bn of credit card debts.”

He says the Financial Conduct Authority should reform the market to ensure that credit cards work better for consumers, especially those in financial difficulty.

“Small changes to existing rules, such as increasing minimum payments from 1% to 2% of the balance or fixing minimum repayments so that they don’t fall as the balance declines, could save people thousands of pound and cut years off repayment periods,” says Mr O’Connor.


Read, S. (2016) 50 years on: How credit cards changed our relationship with money. Available at: (Accessed: 5 July 2016).

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Barclays Android app makes £100 contactless payments

Barclays has upgraded its Android app to allow UK customers to make contactless payments in stores via their handsets.

The bank has opted to provide the facility rather than support Google’s Android Pay service.

Both allow payments of up to £100 via compatible terminals, although sums over £30 require the use of a Pin code.

But Barclays says its app also allows customers to carry on spending if they lose one of their physical cards.

That is because if a card is cancelled, Barclays can immediately upload the details of its replacement to the app, as soon as it is issued.

By contrast, Android Pay requires a user to wait until a replacement card has been received by post so that they can scan or manually type in its details.

However, one analyst said that Android Pay had another factor in its favour: a growing number of apps allow people to use the tool as a way to make payments without having to type in card details.

Android Pay

Other banks support Google’s Android Pay service in the UK

This is also possible via Apple Pay, but not Barclays’ service.

“Swiping your phone in a store doesn’t often offer that much benefit to the user compared with just using a contactless card,” said Jack Kent from the IHS Technology consultancy.

“But what we think will be a big driver to adopting Android Pay or Apple Pay is the in-app purchases, in which people can have their shipping and billing information pre-loaded to help speed up transactions.

“That offers a very clear benefit to users that they can’t get via Barclays’ tool.”

Barclays supports Apple Pay rather than offering a similar proprietary service on iPhones because Apple does not allow third-party apps to make use of its iPhones’ near-field communication (NFC) chips.

Microsoft also launched a new version of its Wallet app this week that allows Windows 10-powered handsets to make contactless payments. However, it is currently limited to US-based phone owners.


BBC (2016) Barclays Android app makes £100 contactless payments. Available at: (Accessed: 23 June 2016).

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Barclays first UK bank to launch contactless payments

Barclays are to roll out a full contactless service on eligible NFC-enabled Android phones in June this year. They will become the first UK bank to offer its own, integrated service enabling contactless payments for both debit cards and credit cards on Android phones.

PayPal appear to be falling behind in UK off-line payments. They made strides with PayPal CheckIn and PayPal Here, but both these service rely on the retailer using PayPal technology or hardware. Barclays have done what PayPal didn’t and fully embraced NFC to deploy their contactless solution, something that PayPal now intend to do “some time in 2016” in partnership with Vodafone.

The solution from Barclays is elegant in that it will be built into their mobile banking app which doubtless most Barclays customers will already have installed on their mobile handset.

In June an updated version of the Barclays Mobile Banking app will be rolled out and automatically detect whether you are eligible for Contactless Mobile – i.e. do you have a compatible NFC-enabled phone running Android Kit Kat or later and an eligible Barclays debit card or eligible Barclaycard. Customers simply select the card they want to be used as the default card and they’re ready to go contactless at any of the 400,000 contactless locations in the UK and across the London transport network.

Once set up, Barclays contactless Mobile enables customers by simply tapping their mobile device on the retailer terminal without needing to open an app, enter a PIN or verify with a fingerprint, making it quicker and simpler than other solutions. Currently, payments up to £30 can be made with contactless in the UK.

Ashok Vaswani, CEO of Barclays UK, said: “Giving customers the choice about how to make everyday payments while making it really easy for people to use our services is why we’ve designed this new contactless payment functionality which will sit at the heart of our already popular mobile banking app. It’s all there, in one place, ready to go with no need to enter card details, delivering a brilliant experience in an instant“.


Dawson, C. (2016) Get Tamebay via Email. Available at: (Accessed: 24 May 2016).

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Barclays won’t support Android Pay in the UK

Barclays has confirmed to techradar that it has no plans to support the Android Pay contactless payment service when it finally launches in the UK.

Google confirmed today that Android Pay will launch “in the next few months”, but the service will only be available to customers of a limited number of banks at launch, with big names such as NatWest, Santander and Barclays missing from the list.

We spoke to Barclays to see if there was a change of heart when it comes to external contactless payment solutions. Unfortunately it confirmed it has no plans to support the Android Pay if the short term.

A Barclays spokesperson told techradar: “At this stage we are not planning on participating in Android Pay in the UK.” Instead Barclays will be putting a bigger focus on its Barclaycard Android app (for phones on Android 4.4.2 and above), which enables customers to make contactless payments without Android Pay.

“In January this year we introduced a contactless mobile payment feature to the Barclaycard Android app that allows customers with an Android phone to make contactless payments for £30 and under, and at some retailers for up to £100, using their mobile device,” the Barclays spokesperson said.

“Alongside this they can manage their account on the go and have lost, stolen and damaged cards instantly replaced onto their phone.” This only applies to Barclaycard credit card customers, and those with debit cards are still out in the cold.


There’s better news for Santander and Natwest customers though, as the banks have confirmed to techradar that they’re actively pursuing the new contactless platform.

“Santander UK is aware of the launch and is actively working with Google to enable its customers to have access to Android Pay later in 2016,” a spokesperson told us. “We will be able to tell our customers more about the timings of this in the coming months.”


Barclays won’t support Android Pay in the UK | TechRadar. 2016. Barclays won’t support Android Pay in the UK | TechRadar. [ONLINE] Available at: [Accessed 24 March 2016].

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Why is Britain’s Barclays Bank pulling out of Africa?

As the UK bank Barclays announced its full year results, local markets were less interested in the numbers and more interested in the back story.

The rumour mill had already been churning for months that there would be a big shake-up.

More specifically there were murmurs, now of course confirmed, of a sale in Africa.

And all this talk of Barclays wanting to get rid of its 62% stake in its Africa business is naturally viewed as an indication that the story of African growth isn’t as real as many “Africa rising” headlines have been suggesting.

When a leading British bank gives up a legacy and a long history of operating in Africa, it’s not a good a sign.

Bogged down

However the story of Barclays’ supposed failure in Africa has as much to do with Barclays as it does with Africa as a continent.

Even though Barclays has maintained a presence in Africa for more than a century, the bank was very slow in taking up the fresh opportunities that presented themselves in the past decade.

Barclays was not as nimble as other banks, such as Standard Bank, Ecobank or GT Bank, which have been snapping up opportunities in Africa.

It was bogged down by the internal bureaucracy of tying up all its assets in a merger with South Africa’s ABSA bank in order to create Barclays Africa.

That process began in 2005, and is yet to be fully completed, and both banks have retained their separate identities thus far.

Barclays in Africa

  • Barclays has had a presence in Africa since 1925
  • Barclays Bank Plc currently owns 62.3% of Barclays Africa Group Limited (BAGL) which controls banks in 10 African countries including Ghana, Kenya, Tanzania and Uganda
  • Barclays Africa Group employs 45,000 people across the continent
  • Barclays Bank Plc has announced plans to dramatically reduce its stake in BAGL
  • In addition Barclays owns Barclays Bank Egypt and Barclays Bank Zimbabwe which it also plans to sell

A full rebranding exercise was suspended a month ago, which should have been an indication of things to come.

The process took longer than had been anticipated which required global shareholders to wait patiently before earning the fair value for their stake.

Continental problems

But the challenge for Barclays has certainly been compounded by the volatility in global markets over the past year, the downturn in the commodities cycle, the slowing of China and the depreciation of many African currencies.

So the opportunities for more growth in Africa simply dwindled.

That may have created fears within Barclays that local African economies simply weren’t ripe for retail banking.

In other words the thinking might have been that in the near future the signs were not promising.

The unemployment figures suggested that not enough jobs were being created for young Africans to start opening up personal and business banks accounts.


Oil worker

Many African economies have grown strongly over the last decade, including Nigeria: but Barclays isn’t convinced the future is rosy enough

That doesn’t bode well for a bank looking to increase its footprint on the continent.

It’s quite unfortunate that Barclays was seemingly ham-strung in a situation where it should have had first mover advantage, having been in Africa for almost a century.

Staley’s moves

Another important variable is Jes Staley himself. The new chief executive was appointed in late October and in less than six months he has made bold moves.

The urgency with which he is acting creates the impression that he’s under pressure to turn things around – quickly.

From the moment he took over, he immediately raised concerns about the volatile market conditions that have seen the economies of Asia and Africa slowdown.


James Staley

Chief executive Jes Staley says Barclays owns 62% of the assets but shoulders 100% of the liabilities for its African business, the reason he cites for wanting change

It’s important to note that Mr Staley is not only pulling out of Africa, but also plans to downsize in other emerging markets such as in Asia, Russia and Brazil.

As the situation worsened and African currencies became weaker, the argument to stay on the continent became less compelling.

Of particular concern, has been the current state of the South African economy since Barclays Africa is listed on the Johannesburg Stock Exchange.

An almost 40% fall in the value of the South African Rand since the beginning of 2015 inadvertently reduced the value of shareholders equity into Barclays Africa.

Unfortunately there is not much that banking executives can do to resolve global volatility and general perceptions about the state of the South African economy.

So without guarantees of when the situation would improve Mr Staley has opted to leave.

Who will buy?

The focus now is going to be on the steps that need to be taken in order to sell Barclays’ stake of an almost two-thirds majority.

It doesn’t come cheap.

Potential investors would need to raise nearly $4bn to buy Barclays.

In these markets, that could be deemed quite expensive.


Someone holding a rand note.

Since January 2015, the South African currency has depreciated by almost 40%

In itself the sale will inspire a new round of speculation and possibly more rumours.

Already, there is talk of that the Public Investment Corporation, South Africa’s largest pension fund, is interested.

But more investors will have to come to the party in order to foot that bill.

Depositors may be worried about what will happen to their funds.

Both Barclays and ABSA have assured bank regulators that depositors’ funds are safe, and only share certificates will be changing hands.

Lost shine

Experts do not foresee a run on the banks.

However for African countries needing a cheerleader, the Barclays sale will have the opposite effect.

It signifies high risks in Africa, low growth prospects and lost shine.

The repercussions will be felt in the long term, as other investors decide take the Barclays cue and sell-up to refocus on Europe and America, the markets now deemed safer and better.


Why is Britain’s Barclays Bank pulling out of Africa? – BBC News. 2016. Why is Britain’s Barclays Bank pulling out of Africa? – BBC News. [ONLINE] Available at: [Accessed 18 March 2016].

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Banking Wars: Barclays PLC vs Lloyds Banking Group PLC

I was shocked when I read full-year results from Barclays (LSE: BARC) and discovered it decided to slash its 2016 dividend by more than half, to yield less than 2% instead of the 4.4% tipsters had suggested. I was especially surprised as a few days earlier, Lloyds Banking Group (LSE: LLOY) had announced a better-than-expected dividend payout in its final results.

What’s interesting is that, though it dropped by 8% on the day of the results, in a couple of days Barclays’ share price recovered to 174.3p, higher than the pre-results price!

What to do now?

Barclays shareholders will still get the expected 6.5p per share for the year just ended and have time to adjust to the new regime, but should they sell now or hold? The latter! In my opinion Barclays is a strong buy.

The dividend cut is painful short term, but probably for the long-term best. The bank earmarked another £1.45bn to cover PPI misselling costs in the final quarter of 2015, is also separating its UK retail arm from its investment banking division, and is still engaged in longer-term cost-cutting. And it intends to return to decent dividend payments in due course.

Barclays shares are now on a forward P/E of just 7.5 for 2016, dropping to 6.6 based on 2017 forecasts — and with earnings expected to grow, we’re even looking at attractively low PEG ratios of 0.2 and 0.5, respectively. Even with lower dividends expected in the shorter term, how can that not be a screaming bargain?

Dividends on the up

Lloyds pleased the punters by announcing an extra 0.5p special dividend on top of its ordinary dividend of 2.25p per share. On a 73p share price, that’s a total yield of 3.8%, which is pretty good as 2015 was the bank’s first year of paying both interim and final dividends since the crunch ended. And it bodes well for the yields of 5.4% and 6.5% forecast for this year and next.

The PPI scandal hit taken by Lloyds is the biggest of them all, with £16bn having been set aside to cover it. But the bank reckons the £4bn for 2015 should be last instalment.

Lloyds doesn’t have EPS growth like Barclays on the cards for this year and next and the shares are on significantly higher P/E multiples of 9.7 and 9.5, respectively. But those are still significantly below the long-term FTSE 100 average of around 14, and for dividends that blow the FTSE average out of the water, that looks like a steal.

What I also like about Lloyds is that it’s tightly focused as a UK retail bank, echoing the divisional split that Barclays is engaged in, and it has avoided the disconnected, clutching-at-all-straws,banking model of the past.

Which to buy?

The dividend picture at Barclays is less attractive in the shorter term, but that’s reflected in the stock’s lower P/E multiple, which implies that if its dividend recovers to match Lloyds’, the shares could be valued around 40% higher.

On the other hand, that dividend at Lloyds looks hard to resist, even without short-term EPS growth. Overall, my money is (literally) on Lloyds, as it’s closer to its long-term structural aims, so giving more clarity and reduced uncertainty. But if I were looking to invest more cash in the sector, my eye might be on Barclays — I don’t think you can lose with either.

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Alan Oscroft owns shares in Lloyds Banking Group. The Motley Fool UK has recommended Barclays. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.


Banking Wars: Barclays PLC vs Lloyds Banking Group PLC – Yahoo Finance UK. 2016. Banking Wars: Barclays PLC vs Lloyds Banking Group PLC – Yahoo Finance UK. [ONLINE] Available at: [Accessed 08 March 2016].