Britain’s biggest challenger bank TSB has inked a seven-year agreement with MasterCard pursuant to which the UK lender will issue new MasterCard-branded debit cards to all its current account holders in 2018.

Furthermore, TSB will continue to issue MasterCard-branded credit cards during the same period.

MasterCard said that TSB, which was spun out of Lloyds in 2013, will emerge as the largest issuer of MasterCard-branded debit cards once all TSB customers are migrated across onto MasterCard branded cards.

Currently, Visa is acting as a debit card issuing partner for TSB.

In addition, the agreement also covers TSB commercial cards, which will allow the bank’s business customers to benefit from the enhanced functionality to control and add flexibility to their company’s spending in the future.

Commenting on the agreement, MasterCard divisional president for UK and Ireland Mark Barnett said: “As a trusted and successful challenger bank, who puts the consumer at the heart of what they offer, we are excited to deepen our relationship with TSB and build out their debit card offering together.

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“This deal is an example of our commitment to grow the issuance of debit MasterCard among our banking partners, and as such we are best placed to support TSB with their transactional and digital banking plans.”

TSB director of product Jatin Patel said: “This partnership presents lots of opportunities for TSB and our customers in 2018 and beyond. We’re looking forward to seeing these opportunities develop and sharing more about what’s in store next year as we continue on our mission to bring more competition to UK banking and ultimately make banking better for all UK consumers.”