Prepaid Card Cos Target Growing Market: People Without Banks

FOXBusiness.com - Prepaid Card Cos Target Growing Market: People Without Banks
For prepaid debit-card providers, the best customer is often the least credit-worthy.

The niche industry, in which companies like Green Dot Corp. (GDOT: 46.02 ,-1.14 ,-2.42%) sell branded debit cards through retailers, has traditionally targeted teenagers learning money management. However, the financial crisis decimated credit ratings, forcing banks to cut ties with subprime clients and creating a new and growing customer base for card providers.

'They are some of our best customers,' Green Dot Chief Executive Steve Streit said of the subprime population. The Monrovia, Calif., company raised more than $160 million in its initial public offering last month, and has seen its shares rise nearly 30% since.