New bank account to pay customers when they shop
Published 30/05/2016 | 02:30
Permanent TSB is to launch a new offer that it says will pay people for using a current account.
The bank will give customers credit for operating their account when they buy goods and services in a range of shops and garages.
It is hoping to attract young customers as it replicates a model that has proved successful for mobile operators trying to sign up those in their 20s and 30s.
It is also aiming to shake up the current account switcher market, which has lost steam in the past year.
However, the new account will see customers having to pay a monthly management fee of just under €5. In return, they will earn money for using their debit card. This is likely to be 10c a time, up to a maximum of €5 a month, the Irish Independent has learnt.
Customers who opt for the new account will also get cash back, worth up to 5pc of bills, when they pay a variety of providers, such as Sky, through a direct debit on the account.
There will be other rewards tailored for individual customers from a variety of retailers. Partners participating from the launch of the account include Sky, SSE Airtricity and Topaz, with more due to join.
It is understood that the bank will portray this new account as offering a way for individual customers to profit from banking with it.
PTSB has long been competing strongly in a bid to get current account customers to switch to it.
Existing customers who have a current account with PTSB get fee-free banking and will retain that deal. Alternatively, they can apply to move to the new current account.
The new account will not require customers to keep a minimum balance in their account, something that a number of banks insist on in order to avoid fees. There will also be no transaction charges.
The move follows PTSB's launch earlier this year of what it calls the '3-in-1 Mortgage' offer, where customers can get 2pc of the value of the mortgage that they take out from the bank in cash when the mortgage is drawn down.
The new product is modelled on similar reward-based incentive schemes operated by mobile phone companies.
Sources close to PTSB said the bank has been working on the product for about 18 months. The sources denied the bank will lose money on the new account.
Although the bank will pay customers who use the account, it will still benefit by having access to current account balances. There was no comment from PTSB about the new product.
Moves by banks to reintroduce fees during the financial collapse means customers are being charged up to €130 a year by their banks for a current account.