Spotlight Returns to Jet Cards

Many corporations still looking to use private jets have revisited the idea of Jet Cards. These prepaid payment cards, allow for a minimum of $100,000 of flight time for executives to fly to meetings. By utilizing this service, companies can see exactly how much money they are going to spend on corporate travel whilst having the luxury of instant flights to their preferred destination. The New York Times reports, Prepaid jet membership cards first appeared in the United States in 1999, pioneered by Sentient Flight Group. The cards have since spread to Europe, but remain something of a novelty in Asia.

For the article mentioned in its entirety, please click here.

Spotlight Returns to Jet Cards

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Expiration Date Rule Change for NJ Gift Cards

According to this article on philly.com, NJ consumers might soon have more protection for their gift cards. Their is a bill that has been approved by The Assembly Consumer Affairs Committee which will ban gift cards and gift certificates from expiring within 24 months of being purchased. The bill will also limit deductions and fees for user inactivity. The bill makes exceptions for certain bank cards that disclose their expiration date and inactivity fees.

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Can Obama Force Credit Card Industry Change or Should You Burn Your Cards?

Ran across this interesting article by William Reed, contributing writer for the Washington Informer. Reed said that the stakes (for credit cards and prepaid) couldn’t be higher and the purveyors of plastic don’t intend to be forced into financial submission. The industry annually collects an estimated $3 trillion in annual credit and debit card transactions, plus billions more in late fees and other charges. America is a nation propped up on credit card debt.

According to Reed's article,

In 2001, 59 percent of African American families had credit cards, compared to 82 percent of White families. Although African American households have lower rates of credit card ownership, African American cardholders are more likely than Whites to have credit card debt. Credit card debt has caused African American families to use critical financial resources to pay mounting monthly interest payments instead of saving or acquiring assets.



Unfortunately, most of the debt African Americans have accumulated is used for items that depreciate in value, such as cars, furniture, electronics, and appliances. This is an indication that Blacks use credit inappropriately - to stretch their incomes. Historic redlining by traditional banks has left high-interest credit cards as one of the few easily accessible sources of loans for minorities.The high levels of un-banked and under-banked Blacks have spawn affinity and co-branded prepaid cards marketed primarily to them. One example is record industry mogul Russell Simmons’ Visa RushCard.



Though Simmons wasn’t in the White House meeting on credit cards, his company is a symptom of the problem. He claims to be solving problems for under-banked communities, which often lack access top a bank account, but complaints are mounting about the fee structure of his prepaid Visa RushCard. To utilize Simmons’ RushCard and “live the American Dream” requires an activation fee of $19.95, a daily convenience fee of $1 (capped at $10 a month) and a $1.95 ATM cash withdrawal fee.



Read Can Obama Force Credit Card Industry Change or Should You Burn Your Cards?

We'd like to hear your thoughts.

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Ten Promotional Uses for Plastic Cards

Prepaid cards are a great way for brands and companies to market their name. Plastek Cards recently released a list of ten ways that companies could use plastic cards to further promote themselves and their brands.

• Business cards. While many people use the traditional business card printed on card stock, nothing about their card really stands out except any colors or images. Make business cards stand out by printing it in high quality plastic that is both durable and strong.
• Membership Cards. If companies require a membership, consider having plastic membership cards instead of paper cards. Membership cards can be printed on plastic that be punched when members come into the business or purchase items in the store.
• Gift Cards. For the holidays, can create customized gift cards on durable plastic. Plastic cards can be printed on one side with business information - logo, location, etc. - and the other side can include strips to write who it's to, who it's from, and how much the gift card is worth.
• Loyalty Cards. To reward frequent purchasers, consider giving them a loyalty card that gives them a certain percentage discount every time they buy from the company or business. Consider having a "Share Your Loyalty Day" and have them bring in friends for discounts on certain days.
• Key Access Cards. If certain business has doors that require keys for in/out access, consider switching to a key card access. Company logos can be printed on one side, and the magnetic stripe for in/out access can be printed on the other.
• Prepaid Phone Cards. Use prepaid phone cards as a way to promote your business and provide long distance service to customers or prospects. A prepaid phone card with company logos and information doubles as a gift and a marketing tool.
• Fundraising Cards. Fundraising cards are perfect for organizations that need fundraising results. These cards entitle the holder to discounts and provides the donating company with increased business. Use these to grow awareness for many kind of companies and business.
• Key Cards. Any plastic card can be made into a key card that attaches to a key ring for easy access and visibility. Membership and loyalty cards can be made into key cards, or advertise business or website by printing info on a key card.
• Luggage Tags. Personalized luggage tags can help identify bags from the rest and can help promote business'. Companies can provide employees with personalized luggage tags so that they're promoting their business while traveling.
• Calendar Cards. Print a calendar on one side of a plastic card and print their business information on the other. People will be inclined to keep the card for the convenience of having the calendar and will be reminded of their services every time.

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Latin Prepaid Cards: Silver Lining?

Anabel Pérez, CEO of NovoPayment, recently wrote an article on Latin Prepaid Cards in the Latin Business Chronicle. Here is an excerpt on her thoughts with regard to prepaid cards offering a silver lining for the global economy.

Prepaid card programs today use the existing payment infrastructure to extend basic – and in some cases, advanced – financial/transactional tools to the base of our population without requiring an underlying bank account. By 2015, the potential number of unbanked Latin Americans with the means and access to take advantage of prepaid general-purpose cards could surpass the 300-million mark, which would represent an estimated purchasing power of more than $200 billion per year. By providing unbanked consumers with new financial options through branded prepaid cards, these enormous sums of cash will be moved from under mattresses into banks’ coffers, reducing acquisition costs and bolstering critical sectors of the economy -- and filling key gaps in economic data.

Do you think that Latin prepaid cards will "fill in the gaps" needed to ignite the global economy? We'd like to here your thoughts.

Be sure to read Anabel Pérez's original article, Latin Prepaid Cards: Silver Lining?

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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!

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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

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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?

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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.

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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.

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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.

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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.

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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?

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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.

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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.

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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.

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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?

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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.

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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

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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.

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