Lloyds to take on payment giants in online shopping

LLOYDS Banking Group is drawing up plans to take on tech giants such as Klarna and Square as it pushes into the booming payments market.

The bank is reshuffling management to focus on new growth areas beyond its core business of mortgages as Charlie Nunn, the chief executive, looks to put his stamp on the business.

One key area earmarked for expansion is payments, the Financial Times reported. In an internal memo, seen by the paper, the bank said: “We will find growth in new areas of payments, working with retailers more closely than ever before.”

The bank is forming a new “embedded finance” team dedicated to assessing options for customers paying for online shopping.

The team will “understand and navigate the fast-paced payment landscape as new competitors arrive and customers expect a level of ease and embedded payment options that will continue to change at pace”.

A shift towards online shopping has seen the payments sector soar in size in recent years. “Buy now, pay later” provider Klarna and payment software provider Square have become two of the most valuable private tech businesses in the world as a result. More recently Barclays has launched its own version of buy now pay later.

Lloyds’ push into payments comes months after Mr Nunn unveiled a £4bn investment over five years to implement a new strategy that is expected to add revenues of £1.5bn by 2026.

Lloyds has the largest market share of UK mortgages but is now looking to focus on areas less dependent on interest rates, such as insurance and wealth management. A management reshuffle accompanying the new strategy has resulted in the recent departure of two of the bank’s most senior retail bankers.

Stephen Noakes, transformation director and a former mortgage director, will leave the company after 15 years as it “is the right time to make his next move and to take on external opportunities”. Vim Maru, group director retail, left last week after his departure was announced earlier this year. It is understood that his role will be broken up as part of the restructuring. Lloyds was contacted for comment. As part of a reshuffle at the top, Elyn Corfield, managing director of consumer finance, will join the executive committee and become director of business and commercial banking.

The retail division will be split into two units, focusing on consumer lending and current accounts respectively.