Santander Tries to Make Name for Itself as Retail Innovator

Santander Bank seems to be trying to win attention in the crowded market for credit card rewards — and the popular mind.

Santander's Bravo MasterCard, released Wednesday, offers triple points for spending on gas, groceries and restaurants. There's a $49 annual fee, though it can be avoided by maintaining a minimum balance in a Santander checking account. Some of the card's other rules for collecting rewards are consumer-friendly.

With the Bravo credit card's "rich rewards offer," Santander is continuing to highlight its new name, changed last year from Sovereign Bank, says Campbell Edlund, president of EMI Strategic Marketing. Santander "has historically not made credit cards a key marketing leader," she says.

"Sovereign had not traditionally used payments as a brand symbol and this looks to me like they are pivoting to a very innovative play... and really making a statement," Edlund says.

Perhaps the Spanish-owned bank is also compensating for a name that isn't easy for some Americans to speak, she says.

"Maybe they're trying to help the local Boston population pronounce Santander," says Edlund, whose firm is located in Boston, one of Santander's biggest markets.

"It's pronounced many different ways around here," she says. "Bank of America (BAC), on the other hand, is easy to pronounce."

For the record, Santander is pronounced "sahn-tahn-DAIR."

Phonetics aside, Santander is "smart" to try to expand its U.S. credit card business, says Odysseas Papadimitriou, chief executive of CardHub. Previously it was limited to its Sphere Visa card.

"If you want to be in the credit card business, which is very lucrative, it's a very tough business to crack," Papadimitriou says. "You need to have offers that can compete in the national stage."

The Bravo card is available to noncustomers of Santander, although existing Santander customers are the prime target initially, says Euan Campbell, head of cards at Santander. The Bravo card's rewards build off Santander's "extra20 checking" promotion, he says. That checking product transfers $20 per month into customers' savings accounts, if they open a new checking account, use online bill payments and sign up for direct deposit.

The new checking product was launched with help from actor Robert De Niro, who appeared in a 60-second ad last fall. All of the efforts are associated with spreading the word about the bank's rebranding, Campbell says.

"We're continuing to tell the story about what Santander stands for," Campbell says. "We'll see other innovations taking place."

The $74 billion-asset Santander, the American retail banking unit of Spain's Banco Santander (SAN), operates more than 700 branches, primarily in the northeastern U.S. It dropped its Sovereign Bank brand in October, spending about $200 million on the switch, including branch overhauls and an advertising campaign. The bank has taken other steps to raise its profile, including the January appointment of former Federal Deposit Insurance Corp. Chairman Sheila Bair to its board.

Santander will find the U.S. credit card field crowded and cutthroat, Papadimitriou says. Community banks have started to jump back into credit cards, with most offering attractive rewards packages, joining the biggest players like Capital One Financial (COF) and American Express (AXP).

Unlike the new subprime credit card planned by the firm of former regulator Raj Date, Santander's Bravo card is aimed at higher-income customers, Edlund says. Rewards points are capped at 15,000 per quarter. And if a consumer is assessed an annual fee, the $49 amount is low enough that it's easily justified by those who plan to use the card heavily, she says.

"It's designed for card users who spend actively on the card and are mass affluent or higher," Edlund says.

"It's rich and bold, and Santander is a bold brand," Edlund says. "They like to make bold statements."