Tesco won't launch current account until 2013

by Ed Bowsher on 07 February 2012  |  13 comments
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Tesco's decision to delay the launch of its current account is a big disappointment.

I’m very disappointed that Tesco has delayed its current account launch to next year. I had once hoped that Tesco current accounts would be on the market in 2011, but now we’re going to have to wait until 2013.

I can understand why Tesco is waiting. It wants to make sure the launch goes well and there are no teething problems.

However, although that’s understandable, I’m still very disappointed by Tesco’s decision. The best way to improve customer service is to increase competition, and Tesco’s entry into the current account market should make a real difference.

Yes, it’s true that some other players are already boosting competition. In particular, Virgin Money has now bought Northern Rock and Co-op is set to buy a bunch of branches from Lloyds. We also had the launch of Metro Bank in 2010. But I suspect that Tesco’s current account launch will make a much bigger impact than any of the other moves.

I say this for three reasons:

-          Tesco is a highly successful, ruthless company that has succeeded by giving customers what they want.

-          It has a ready-made branch network thanks to its massive supermarket estate.

-          It already offers some strong financial products. I’m a particular fan of the Tesco Bank Personal Loan which charges just 6.1% in interest. So I’m confident that Tesco’s current account will have some attractive terms and conditions and will capture significant market share. 

Let’s just hope that Tesco doesn’t tarry any longer and that its current account does finally hit the market next year.

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