Barclaycard is becoming a force to be reckoned with in the U.S. cobranded card arena.

With its acquisition of the $1.3 billion cobranded card operations of student-loan giant SLM Corp., including its Sallie Mae Visa and Upromise MasterCard issued by Bank of America Corp., Barclaycard appears to be back on the warpath to build a diverse stable of cobranded cards to rival JPMorgan Chase & Co. and Citigroup Inc.

The deal, which encompasses 300,000 active cardholders, also relieves BofA of one of its larger cobranded card portfolios, which it has been unloading rapidly since last year when it announced plans to divest many of its credit card operations to focus on core banking services (see story).

BofA has divested a broad array of card operations in recent months, but it was the relatively large size of the Sallie Mae and Upromise portfolio, plus its reach to mainstream consumers and families, that made it a particularly compelling acquisition, Surinder Singh, general manager-U.S. Cards, Barclaycard US, tells PaymentsSource.

Barclaycard in 2009 began a string of cobranded card launches and acquisitions that included taking over the U.S. Airways card portfolio that year and the National Football League card the next, then launching cobranded hotel cards with Best Western, Choice Hotels and Wyndham Hotels (see story).

In September of last year Barclays launched a cobranded card with Williams Sonoma (see story).

The core product in the portfolio Barclays acquired from BofA this week is the Upromise cobranded MasterCard, which enables cardholders to earn rewards they may apply toward college savings plans, pay down student loans or invest in other SLM-managed accounts. Cardholders may accelerate rewards by making purchases through thousands of brick-and-mortar merchants and 900 online merchants, an SLM spokesperson says.

“It was a strategic opportunity for us to connect to a mature brand that has broad recognition and a good marketing platform,” Singh says, noting Barclays will rely heavily on SLM’s existing marketing programs to promote the card to new customers.

The deal also unifies the Sallie Mae and Upromise cards under a single issuer after a somewhat tumultuous ownership path, which SLM sees as a plus, Tim Hanrahan, SLM senior vice president of credit card and banking products, tells PaymentsSource.

Citi launched the Upromise cobranded MasterCard in 2001 and continued to run the portfolio after SLM acquired Upromise in 2006. BofA purchased the Upromise portfolio in 2009. And in March of 2011 SLM separately launched the Sallie Mae Visa card, and managed it in-house.

Barclays plans to relaunch the card during the second quarter and will “review” its card network relationships, Singh says. Singh joined Barclays in during the fourth quarter of 2010 after three decades with MasterCard-heavy Citi.

As part of the deal, BofA will continue to service the Sallie Mae and Upromise cards through September, a BofA spokesperson says.

SLM will continue to do “much of the marketing” for the Upromise and Sallie Mae cards, Hanrahan says, noting SLM has no plans to launch another credit card on its own.

Terms of the deal were not disclosed, but Robert Hammer, CEO of credit card consulting firm RK Hammer, estimates the average premium for card deals so far this year to be around 17% of total receivables, up from 14.4% last year.

“Premiums can range from zero to as high as 19%, depending on why the portfolio is changing hands,” Hammer says.

The Barclays-Upromise deal, which an SLM spokesperson says the issuers orchestrated in December, is helping to get the year off to a good start for credit card portfolio sales, Hammer notes.

“Credit quality is improving, and potential buyers that were on hold during the slowdown of the recession have been stockpiling cash so we expect to see more deals,” he says.

Analysts generally believe the move is a coup for Barclaycard.

The complexity of the deal Barclaycard struck–with two brands, two issuers and an attached merchant coalition–“probably means there weren’t a lot of competitors vying for it,” suggests Brian Riley, senior research director at TowerGroup.

“The whole Upromise concept is a good one, but it’s not a real easy thing to work with,” Riley says. “You’ve got a lot of moving parts.”

But student lending is a hot area, he notes.

“With student loan debt beginning to rival total credit card debt, there’s a lot of potential to revolve balances,” Riley says.

Barclaycard’s latest acquisition confirms its determination to become “a major cobranded card issuer rivaling Chase and Citi and now Capital One, which recently jumped into cobranding,” Megan Bramlette, a director with Auriemma Consulting Group, tells PaymentsSource. “It’s smart for Barclaycard to pick up portfolios that already have strong marketing connections to cardholders because they have no U.S. branch network and Upromise gives them yet another diverse channel to reach consumers on a broad level.”

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