The start up, backed by major US investment houses, bids to become a major business in the British credit card market.
Digital credit firm Jaja Finance has bought Bank of Ireland’s (BoI) British credit card portfolio for £530m in a bid to “become a major player in the UK credit card market”.
The London-based fintech made the cash purchase as part of a consortium, which includes giant US investment houses KKR and Centerbridge Partners.
The deal will see Jaja take control of Post Office and AA-branded cards, which are part of BoI UK portfolio.
In a separate agreement, Jaja will also become “the consumer credit card issuer for Bank of Ireland UK and the strategic long term partner the AA”.
The move by Jaja is a bid to gain scale in a crowded credit card market dominated by Visa, Mastercard, and a range of bank and retail store cards.
Jaja, founded by Norwegian entrepreneurs Jostein Svendsen, Kyrre Riksen and Per Elvebakk, launched its first credit card in February, adding it had a 6,000-strong waiting list. It will not disclose how many new cardholders it inherits as part of the deal.
The start up, launched in 2015, describes itself as “a digital, mobile-first” credit business that provides physical cards, with Visa, as well as services through consumers digital wallets.
Jaja chief executive Neil Radley, a former managing director of Barclaycard in Western Europe, said: “Our vision is to enable a new generation of mobile-first credit card products with unrivalled functionality, service and security. We’re excited to be welcoming Bank of Ireland UK customers as cardholders.”
Bank of Ireland UK chief executive Des Crowley added that the lender was happy to partner with Jaja “to bring their next-generation credit card to customers across the UK”.
The bank said the sale was part of its strategy, first announced at its investor day last June, to increase returns from its UK business.
The lender said the credit card portfolio worth around £545m at the end of December last year, adding that in 2018 the portfolio contributed £35m of total income to the group, incurring operating expenses of £36m.
The portfolio sale does not include the bank’s Northern Ireland commercial credit card portfolio. The Bank added that credit cards issued in the Republic of Ireland are not part of the agreement.