These are troubling times for Britain's clearing banks. This week, after a campaign of attrition by outraged consumers, backed by the press and the government, they were forced to withdraw plans to charge non-customers for using their cash machines. Meanwhile the fat profits they have earned on their traditional businesses—notably home loans—are under threat from new entrants, new Internet-based services, new official scrutiny and fiercer competition from old rivals. The credit-card business was one of the first to come under attack, with so-called monoline (ie, single-product) providers, such as America's MBNA, undercutting the banks'juicy margins. Incumbents have been forced to offer tiered rates that reward better customers, as well as additional products, such as insurance for some goods and services bought with the cards. New Internet banks have made audacious bids for market share by offering loss-making rates on credit cards, savings and mortgages.
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