MBNA Corp. has teamed up with barnesandnoble.com Inc. to develop a cobranded credit card that lets cardholders earn rewards at the bookseller's on-line and brick-and-mortar stores.
The companies are calling the agreement "the first and only such arrangement that spans the Internet and traditional sales channels of a major U.S. retailer."
Under terms of the deal, MBNA will have exclusive rights to market credit cards to barnesandnoble.com customers and will become an affiliate of its on-line network. The Wilmington, Del., issuer will also have marketing rights to Barnes & Noble's 528 stores, 444 B. Dalton stores, 400 textbook stores at universities around the country, and textbooks.com.
The cards will have no annual fee and an interest rate of 13.9%.
Cardholders will accrue points for every dollar spent on the card and can redeem them for discounts on books, both on- and off-line.
"This relationship marks an important step in leveraging the power of our multichannel network, which reaches tens of millions of customers," said Carl Rosendorf, senior vice president of barnesandnoble. com. The rewards program will give them "great reasons to come back and shop with us again and again," he said. "Strategically it is a perfect fit for two strong brands."
As part of the deal, barnesandnoble.com is to be featured on MBNA's three Web sites: MBNA netaccess.com, MBNAwallet.com, and MBNAoffers.com, and it will be able to market its products to MBNA customers.
Barnesandnoble.com's main competitor, Amazon.com, recently launched a cobranded card with on-line issuer Nextcard.com, but Christopher Staab, managing associate at Auriemma Consulting Group in Westbury, N.Y., said this deal is very different from those involving other cobranded Internet cards because Barnes & Noble has a strong presence in the physical world.
"On-line shoppers are still a very small percentage at this point," Mr. Staab said, "so with this agreement, you'll pick up those who are shopping in a traditional method as well."
"It has the potential to be a very large program."
Mr. Staab predicted that as Internet commerce grows, cobranding programs will have to offer access to both traditional and virtual stores.
"Anybody who has an on-line strategy and has an existing cobrand program for their physical stores has to expand that into the virtual world," Mr. Staab said.
Separately, MBNA announced Thursday that it had signed an agreement with America Online Europe to issue a cobranded card in the United Kingdom. Under the multiyear deal, MBNA is to be the exclusive issuer of AOL and CompuServe branded credit cards in the United Kingdom.
MBNA set up operations there in 1993 and has more than three million British cardholders.