Grocery giant prepping Net banking service
Royal Ahold, the Dutch grocery conglomerate that owns Peapod and five U.S. supermarket chains, strikes a deal with a Canadian bank unit to offer electronic banking services.
The company struck a deal with Amicus Financial, the electronic banking unit of Canadian Imperial Bank of Commerce, to provide online financial services. Financial terms of the deal were not disclosed.
Starting in the fall, customers will have access to Amicus accounts via the Web, telephone or ATM machines, said Jan Hol, a spokesman for Ahold, which operates 1,300 U.S. supermarkets mostly on the East Coast.
Ahold, which also owns a majority share in online grocer Peapod, is the latest retailer to delve into the growing area of online financial services. Many traditional retailers and online companies--including Yahoo and 7-Eleven--see an opportunity to penetrate the financial services market, a turf that was historically controlled by banks and other financial institutions.
Citibank on Wednesday raised its investment in electronic bill payment by joining online banking consortium Spectrum. Spectrum, a consortium formed in 1999 by Chase Manhattan Bank, First Union and Wells Fargo, acts as an online exchange to route electronic bills between banks and their customers.
Instead of watching upstart Internet financial services companies or traditional banks corner the market, the Web has provided a way for merchants to offer online banking, lending and bill payment services.
"The main driver for this deal is the need to offer customers convenience," Hol said Wednesday. "You don't have to come into the store to do your banking anymore, and because it's an Internet bank, it can offer very attractive rates for all kinds of services."
Hol said the Amicus deal calls for Ahold to install small bank branches, or "pavilions," inside each of its supermarkets. The company has leased space to other banks, such as Chase Bank, but most of those deals will expire within the next three years, Hol said. When they do, Ahold will replace the outgoing bank pavilions with Amicus-operated ones.
Amicus delivers online banking services to companies that then offer them under their own brand name. Besides Peapod, the banking services will be offered to Ahold's five brick-and-mortar U.S. grocery chains including Giant Food Stores, Stop & Shop and Tops Markets. Peapod will eventually also offer banking services, Hol said.