Department store House of Fraser is set to invest £35m in challenger bank Tandem.
The UK store aims offer its shoppers an exclusive banking tool and payment method with the £35m going towards developing an app-only banking service for its customers.
Challenger bank Tandem, which only gained its banking license at the end of 2015, has so far raised $30m from investors such as eBay co-founder Pierre Omidyar since it was founded in 2014.
House of Fraser meanwhile was acquired by the Chinese conglomerate Sanpower for £480 in 2014.
The department store already operates a loyalty and credit card scheme with NewDay but the deal with Tandem could see it taking a new direction.
While Tandem is a newcomer to the market, it has already rolled out its mobile app to more than 10,000 customers and has plans to launch both current accounts and credit cards later this year.
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Tandem is far from the only challenger bank in the market as it competes with others such as Monzo (formerly Mondo), Starling and Atom.
The UK department store is on an expansion drive over the past year with plans to launch its first overseas website in Australia and to invest £40m in IT infrastructure.
Ricky Knox, founder and deputy CEO of Tandem, said: “House of Fraser is one of the great loved retail giants, with a customer-centric heritage that aligns closely with Tandem’s mission and values.
“We’re excited about the opportunity to help their loyal customers with their financial lives.”
Frank Slevin, Chairman, House of Fraser, said: “House of Fraser is committed to a transformation of its business over the next five years and this new partnership is just one illustration of how we’ll deliver a meaningfully different set of services to our customers.”
