TSYS Set to Acquire NetSpend in $1.4B Deal

TSYS, a leading global payment solutions provider announced yesterday that they will acquire NetSpend, a leading U.S. provider of general purpose reloadable (GPR) prepaid debit cards to underbanked consumers. It’s a transaction valued at approximately $1.4 billion.

At Prepaid Expo, attendees will get exclusive insight from NetSpend that will provide analysis on this strategic move. Dan Henry, CEO of NetSpend, will be giving his insights on the future of GPR alongside a panel of heavy hitters. Additionally, Tim Pfeifer, Corporate Counsel at NetSpend, will join Don Mosher of Schulte Roth & Zabel for an executive session focused on M&A and IPOs in prepaid – which will shed some light on the consolidation environment in the prepaid space.

For TSYS, the move is transformational in its move to grow its business while complementing its foothold in prepaid processing, according to Philip W. Tomlinson, TSYS’s chairman of the board and CEO.

“[The acquisition] enables us to meet our strategic goals of diversifying our business, being a more innovative payment solutions provider and expanding our role within an area of payments that is expected to grow at a 20% annual rate over the next four years,” said Tomlinson in a statement.

This is a major deal in the prepaid industry, positioning TSYS, the huge processor, to maintain market share amidst strong competitors like Square while accelerating the growth of NetSpend, which should place even more pressure on competitors like Green Dot.

With NetSpend’s extremely extensive distribution network of over 62,000 locations, 130,000 reload locations, and more than 2.4 million accounts, TSYS and NetSpend are solidifying themselves as one of the industry’s biggest players.

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Combination ID/Prepaid Card: Set to Debut in Oakland

Prepaid is one of the most flexible forms of payment available – and its latest incarnation, in Oakland, California, is a city-issued ID card for undocumented residents who are often financially vulnerable and under- or unbanked. It is the first city in the U.S. to offer municipal ID cards with prepaid features.

The card, dubbed the Oakland City ID Prepaid MasterCard  is a joint venture between SF Global, MasterCard, and University National Bank. The card was designed to provide identification (particularly so users can identify themselves to legal authorities) as well as provide entrance into affordable financial services. Card users can take advantage of direct deposit, as well as shop online with the card.

According to the Oakland Tribune, the card alone will cost $15. The prepaid features cost $2.99 per month. Other fees include a $1.50 ATM withdrawal fee, a 75-cent fee on purchases and a $1.75 fee for calling customer service. It will cost $2.95 to load money onto the card.

The applications for the program are now being accepted by the city and the first cards expect to be issued by March 15th. The city expects to issue 6,000 cards this year.

A similar card is slated to debut in Richmond, Calif., and apparently, Los Angeles is also considering the idea. What do you think of this sort of opportunity for the prepaid industry? This is a huge development for the prepaid industry because it is a direct link between a person’s identity and spending –increasing security for unbanked finances.

Where will prepaid head next? Find out at the Prepaid Expo this March. For more information about the Expo, click here.





See the full article here.

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Showcase your Innovations in Mobile and Emerging Payments at Prepaid Expo

Is your company changing how people can pay? The diversity of the prepaid market has made it a ripe industry for technological adoption and implementation.

Prepaid Expo 2013 has created an all-new Emerging Payments Pavilion for 2013 in the central hub of the exhibit hall. Attendees can learn about and shop for new technologies and payment systems to implement into their business plans.

Own your own 10 x 4 ½“ storefront in the Mobile Pavilion and showcase your solutions to 1,400+ players in the prepaid market; including decision-makers from card networks, processors, banks, retailers, technology providers, and telecommunications.

Space is very limited, sign on today! For more information, or to reserve your space today, please contact Matthew Middleton – 646.616.7604 mmiddleton@iirusa.com

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No More Overdraft Fees for UTB Prepaid Customers

According to the Center for Responsible Lending, U.S. Households spend more on overdraft fees than on fresh veggies. Whether financial reform will change that remains to be seen.







On Friday, the $566 million-asset Urban Trust Bank (UTB) of Lake Mary, FL has stopped charging overdraft fees on prepaid cards. This came in response to consumer advocates who claimed the card offered overdraft protection for a fee of 15 cents for every $1 in negative balance, a rate that exceeded the interest-rate caps in several states.

The prepaid industry is getting scrutinized more and more about overdraft protection, regulation, as well as the fees – as we saw last week with the prepaid reforms from Attorney General Pam Bondi in Florida. In March at the Prepaid Expo, we will have a panel discussion on overdraft protection with a Netspend executive.

See the full list of speakers and to learn more about the Prepaid Expo click here.

See the original article here.

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Facebook: The Next Player in Prepaid?

Facebook is expanding their prepaid presence with the launch of its own branded gift card. The card began rolling out last week and continues to expand availability gradually for U.S. users. This card is currently available for use at four merchant partners; Jamba Juice, Olive Garden, Sephora, and Target. Once a user physically possesses the card, gift amounts will be loaded onto that card – which has separate balances for each merchant. Balances are available to monitor from within users Facebook accounts, and users will receive a notification every time  a charge is made.

This is an interesting move from Facebook – especially given the numerous more flexible gift card options in the market.  Does a move from a social media heavyweight like Facebook have merit or do their failed attempts at virtual currency hang a shadow over this development?

Either way you see it, Facebook’s move clearly denotes one thing – prepaid is a growing industry and competition continues to heighten.

Prepaid Players –  let us know what you think about this move from Facebook!

See the full article from Paybefore here.



ABOUT THE AUTHOR

Ryan Geswell is a New Media Analyst in the Finance Division at IIR USA with a background in Marketing and Media. He can be reached at rgeswell@iirusa.com.

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Where Do YOU Think Prepaid and Payments are Headed?

The Prepaid Expo and the Mercator Advisory Group have co-authored a prepaid industry attitudinal survey. Respondents from across the entire prepaid industry will be able to voice their opinion on where they feel prepaid is headed. 


You can participate in the survey here or scan the QR code. The survey has been divided into two separate paths, with tailored questions for GPR players and closed-loop players. Participants will be entered to win a 16GB iPad with retina display.

Results from this survey will be revealed at the Prepaid Expo this March – as well as the winner of the iPad. Data from the survey is exclusive data that you will not be able to find anywhere else. You do not want to miss the opportunity for exclusive industry insights. Click here to register for the Prepaid Expo.

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