What: More information has come to light on persistent rumours that Coles, owned by Wesfarmers Ltd (ASX: WES), is planning a move deeper into financial services.
So what: According to a report in the Australian Financial Review (AFR) Coles has pulled together a ‘Strategy Team’ to work on confidential projects including a digital wallet. Like its competitor, Woolworths Limited (ASX: WOW), Coles already offers credit cards and has a rapidly expanding insurance offering, however there are expectations that the group has its eyes on entering the banking sector.
Now what: Coles is believed to be taking its lead from UK-based retailers such as Tesco which already take deposits and issue personal loans with rumours continuing to circulate that Coles has applied to APRA for a banking license which would allow it to also take deposits and issue loans.
With a network of nearly 800 stores and literally millions of customers coming through its doors each week, the potential for Coles to take market share from the likes of Commonwealth Bank of Australia (ASX: CBA) and its banking peers would appear very real.
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Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.