What CIBC’s break up with PC Financial means for you

This is what will happen to your PC Points and other services with President’s Choice
(Ian Muttoo/Flickr)
(Ian Muttoo/Flickr)

Loblaw Co. is quitting the banking business in a deal that will see two million President’s Choice Financial mortgage and banking accounts automatically move to a new, low-fee banking brand operated by CIBC, called Simplii Financial.

The deal is effective Nov. 1 and ends a 19-year partnership between Loblaw and CIBC, which ran PC Financial. Loblaw will maintain its PC Points program and continue to offer a MasterCard credit card aligned with PC Points. Here is what this news means for you.

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What happens to my PC Points?

PC Financial MasterCard products remain unchanged. President’s Choice Financial said it will continue to focus on payments and loyalty through its MasterCard and PC Plus Products.

If you move to Simplii, you will no longer automatically accumulate PC Points by using your banking services after Oct. 31. But anyone can still sign up for a PC Points account or use the app to gather points, which can be used to redeem free groceries. Additional points can be collected with the PC Financial MasterCard.

What about banking services?

Banking services at in-store pavilions and ATMs operated by CIBC will be phased out of Loblaws and partner grocery stores between Nov. 1, 2017 and March 31, 2018. The PC Financial brand of consumer banking services will disappear.

What happens if you are a current PC Financial client?

Whether you have a savings or chequing account, an RRSP, a loan, or are a mortgage holder, you will be transferred to CIBC’s new digital bank. Account numbers stay the same. CIBC will send you a new debit card that won’t be affiliated with PC Points. Simplii customers will have the same no-fee daily banking and interest rates as under PC Financial. Likewise, terms and conditions of mortgages will remain unchanged.

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Why is this happening?

The bank is looking to build Simplii Financial to take more control over its low-fee brand strategy. Simplii’s key target will be clients who prefer low-fee accounts and user-friendly online services.

While the branding and points program of PC Financial were tied to Loblaw, CIBC has always run the actual back-end banking operations. CIBC expects to incur fees and charges of about $100 million pre-tax in the current quarter, ending Oct. 31, because of the switch.

For Loblaw, the priority has always been the PC Points program, and by holding onto the credit card deal with MasterCard it will retain that high-margin lending business.