Help Preserve Prepaid Card Business

Next week the Senate will vote on legislation that threatens the viability of network branded prepaid cards. New additions to the Credit CARD Act (S. 414) by Senator Chuck Schumer (D-NY)would have a devastating effect on Prepaid Cards. The Schumer Amendment essentially restricts organizations involved in delivering network branded prepaid gift cards from assessing service fees and lengthens the expiration period on network branded prepaid gift cards in a manner that is virtually impossible to implement and would trigger great expense to U.S. merchants.

We urge you to send letters to your local senators as quickly as possible, and if you can, please copy or blind copy kathyt@nbpca.com so that we can aid in the follow up with the offices to reiterate the message.

Thanks for your time!

Prepaid Professionals April Newsletter

Here's the April edition of the newsletter we regularly send out to our Prepaid Professionals LinkedIn group members. Remember to join our LinkedIn Group if you haven't so already in order to receive these announcements on a monthly basis. Enjoy!

Read the Newsletter

RushCard: American Dream or Enabling American Debt?

Russell Simmons has recently been under fire from Boyce Watkins, a professor of finance at Syracuse University on whether or not his Visa RushCard actually gives people access to the American Dream. According to this post in Taking Charge, Watkins mentions:

"I never really knew the American Dream consisted of having a piece of plastic that puts people further and further in debt.

He goes on to criticize the Visa Rush Card fee structure that charges an activation fee of $19.95, daily convenience fees of $1.00, and even ATM withdrawal fees of $1.95. Russell Simmons recently responded to the publicity and mentioned:

"The RushCard is a prepaid card, NOT a credit card. It gives people the convenience of a credit card without the debt. I have watched with pride the way RushCard has changed the lives of hundreds of thousands of people giving them respect and dignity. It gives underserved communities the tools to get their money right."

What do you think about the feud between Russell and Watkins?

Western Union provides prepaid cards overnight

Western Union is offering a new service to customers that offers home delivery to its customers via the MoneyWise Visa Prepaid Card. The loaded cards are delivered to their users to their home or business over night via FedEx. Find out more here.

Prepaid On-the-Go

In an era where more time is spent text messaging then making phone calls, it's no wonder why prepaid cards are taking advantage of consumers' attachment to their cell phones. According to this article in the Wall Street Journal blog MasterCard and Blaze Mobile Inc have entered into a trial program where they have sent near-field-communication cards to their customers with instructions for them to attach the cards to the backs of their cellphones. After they set up a prepaid account, they will be able to make payments using their phone as specifically equipped NY taxi companies and several drug stores and retail stores around the US. The Blaze Mobile Wallet program is available at the iTunes App Store for $1.99.

How do consumers look at prepaid cards?

At RTO Online, they look at a new survey that was recently released that explains why consumers like prepaid cards. It has been shown that by using prepaid cards, consumers are able to enhance their financial wellbeing.

Other reasons they like to use prepaid cards: convenience, accessibility, immediate liquidity, simplicity and transparency, value, and built-in discipline.

Read the full report here.

MasterCard Readies TV Push for Prepaid

According to Maria Aspan of Bank Technology News,

MasterCard Inc. is preparing to address what many prepaid card executives call the niche's No. 1 problem: consumer awareness.

The Purchase, N.Y., payments network is planning to unveil a consumer advertising campaign this spring, including television commercials, to promote reloadable prepaid cards to a larger audience.

Will this heavy direct to consumer advertising work for MasterCard or has the public already been inundated with offers for payment cards? What will be interesting is to see how the public reacts to payment cards that don't have APR, late fees and potentially negative connotations for the consumer's credit report. We'd like to hear your thoughts on MasterCard's plan.

Prepaid Cards - A Risk Reducer for Businesses

At the Q&A Forum at What Investment they have recently given some examples of how prepaid cards could reduce risks and hassle for businesses. One of the examples include Phil Smallwood, who is the co-founder of marketing and distribution specialist at TPS Direct. He was concerned about the security implications of handing out company credit cards but now with prepaid cards he is able to better manage expenses, and is also able to complete transactions both online and through his mobile phone.

Jonathan Rees, a sales director at M-Cube, has stated that his company his seen rapid growth due to prepaid cards as ‘credit card limits are being capped’ by banks.

These are interesting examples, but what are some other ones that your company has experienced?

Hybrid cards may be the future

At CreditCards.com, they talk about the growing popularity of hybrid prepaid/credit cards. These cards allow the user to both build credit and yet avoid the problems that can come with prepaid cards. The card comes with a normal way to deposit money like other prepaid cards, but also has a line of credit or advanced payroll loans. For more information, read the full article here.

Beginner's Guide To: Prepaid cards

According to Collette Walsh, moneysupermarket.com; prepaid cards are a great way for individuals looking for the freedom of a credit card without the high interest rates, penalties and large fees associated with traditional credit cards. In her recent article in The Indepedent, she encourages travelers to use prepaid cards (which we covered in our last post) because it offers realtime exchage rates for purchase.

Prepaid Cards Help Reduce Costs when Spending Abroad

This article on MoneyHighStreet.com gives a warning to consumers who will be using debit and cards out of the country this Easter break. The article highlights how debit cards carry transaction fees and even foreign exchange conversion fees, which can be pricey.

An alternative to this is using prepaid currency cards. Compared to debit and credit cards, it can help you save on overseas transaction fees. Some cards that are offered now include: Caxton FX, FairFX, Travelex, Lloyds TSB, Indigo Traveller and ICE Traveller.

WalMart MoneyCard

According to Bankaholic, they see the WalMart MoneyCard as the best value for a prepaid card. They state it has the lowest fees, all of which are waived if they are direct deposited, which is important in today's economy. They also state that the deposits are FDIC insured. What do you think? Is WalMart the best prepaid card for consumers? What do other cards offer that WalMart doesn't?

Booming Prepaid usage in China

This post on PCWorld discusses how payment processing in China is booming during these times of economic hardship. Only 15% of the Chinese population have credit cards, and so prepaid cards have become particularly important for Chinese payment providers. 99Bill, a payment provider, is one of the many that are now riding the e-commerce wave in China. With a huge population that is still unbanked, the opportunity for prepaid card expansion is huge.

Omni Prepaid can now offer MasterCard

Omni Prepaid cards have completed the MasterCard certification process and will will now be able to mail, personalize, emboss and embed their prepaid cards with MasterCard. The also offer Visa.

CEO Jason Wolfe had this to say about the new certification process:
"This certification is another stepping stone towards our mission of becoming a one-stop-shop for clients looking for vertically integrated solutions in the prepaid market space."

Source

Private Prepaid Cards Take Lumps From Recession: Survey

According to Joseph Rosta of USBanker, some elite prepaid cards are losing their luster in the recession. Rosta sites a recent report by Aite Group reporting that based on a survey of 21 card industry executives. Eighty-two percent of those participating say current economic conditions are have a “somewhat to very adverse” impact on the sale of private-label cards, as expanding retailer bankruptcies stoke consumer fears they could be stuck holding worthless and unredeemable gift and other prepaid cards from defunct chain stores.

Are you seeing these changes?

For more information, please visit Rosta's original article here.

White Eagle and hiten Cards Launch Prepaid MasterCard

The Paypers reports that two UK prepaid card services providers White Eagle and hiten Cards have teamed up to launch the hiten Prepaid MasterCard for UK customers.

This card features pin and chip security, so it can be used for online purchases, sending money to family members, and for ATM withdrawals across 210 countries. White Eagle's unit Eagle Prepaid is set to take over technical support responsibilities for the prepaid card.