Banks Look to Prepaid Cards to Replace Lost Revenue

Banks Look to Prepaid Cards to Replace Lost Revenue - WSJ.com
Big banks may soon start pushing a different type of plastic to their customers.
Financial institutions such as U.S. Bancorp, Wells Fargo & Co. and Bank of America Corp. are exploring prepaid cards as a way to make up revenue that will likely be lost from federal restrictions on debit cards. That is because prepaid cards, which are preloaded with funds and used like debit cards, are exempt from restrictions in the Dodd-Frank financial-overhaul bill.

Visa prepaid cards by Green Dot at a drugstore in New York.The law, enacted earlier this year, is expected to reduce significantly the transaction fees that banks collect from merchants with each swipe of a debit card, known as interchange fees. The Federal Reserve hasn't yet provided details on the new debit-card restrictions, but a survey released by CardHub.com last month estimated banks could lose as much as $9 billion of the $22.8 billion collected each year in interchange fees."

Mint Announces New Director and Updates Market on Middle East Business

Mint Announces New Director and Updates Market on Middle East Business
Mint Technology Corp (TSX VENTURE:MIT)('the Corporation') announced today the appointment of Mr. Nabil Bader as a Director of the Corporation and the resignation of Mr. Robert Raich. The Board thanks Mr. Raich for his contribution and support over the last 18 months.

Mr. Bader is the CEO of the Corporation's 60% owned subsidiary, Mint Middle East LLC ('MME'), and is based in Dubai, United Arab Emirates. 'Nabil is a pioneer in the prepaid space in the Middle East North Africa (MENA) region and currently has executive responsibility for the Corporation's Middle East subsidiary and its business development throughout the region. He brings to the Board hands on business experience for our financial products in this rapidly growing territory and on behalf of the Board, we welcome him', said Chris Hogg, Mint's President and CEO.

Fed’s Duke Says Regulators Should Watch Prepaid Credit Cards

Fed’s Duke Says Regulators Should Watch Prepaid Credit Cards - Bloomberg
Federal Reserve Governor Elizabeth Duke said U.S. regulators need to protect consumers from differences among prepaid credit cards and other payment “devices.”

“It will be important for regulators to monitor, over time, the effect of differences in regulation and pricing restrictions to ensure that consumers are adequately protected regardless of their payment method preferences,” Duke said today in the prepared remarks of a speech at the Philadelphia Fed.

Consumers cannot be expected to know the differences between payments made using prepaid cards, which are subject to different regulations and fee restrictions based in part on their issuers and type, Duke said during speech at a conference on consumer credit.

Shares in prepaid card firms mixed on analyst note

Shares in prepaid card firms mixed on analyst note - BusinessWeek
Shares in prepaid card industry companies were mixed Monday after a Goldman Sachs analyst outlined favorable trends for consumer adoption of prepaid cards and initiated coverage on two of the sector's largest card providers.

In a research note, analyst John Williams said prepaid card usage should grow over the next several years as consumers continue to shift from using cash and checks toward electronic payments and, in some cases, back off using traditional bank cards amid concerns over fees.

Williams also noted that prepaid cards were spared in a legislative ramp up of regulatory oversight on the financial industry.

In prepaid cards, Green Dot swipes NetSpend | Reuters

RPT-BUY OR SELL-In prepaid cards, Green Dot swipes NetSpend Reuters
Americans are expected to more than treble the amount of money loaded on to prepaid debit cards to $118 billion within two years -- a lucrative prize for two small, pure-play companies competing in this growth market.

Both Green Dot Corp (GDOT.N) and NetSpend Holdings (NTSP.O) recently listed, but the former's ties with major retailers like minority stakeholder Wal-Mart Stores Inc (WMT.N) gives it the edge, analysts say.

The fast-growth prepaid card sector is aimed primarily at younger, low-income and under-banked consumers who rely on cash and don't have much access to credit.

Colleges & Universities Partner with Blackboard to Streamline Delivery of Millions in Financial Aid

Colleges & Universities Partner with Blackboard to Streamline Delivery of Millions in Financial Aid
Blackboard Inc. (Nasdaq: BBBB) today announced that three colleges and universities - the first to implement the new BlackboardPay(TM) prepaid card program - will deliver over $40 million in financial aid to students through the service.

The University of Texas at Tyler (UT Tyler), Georgia Gwinnett College and Jones County Junior College in Mississippi have used BlackboardPay to simplify financial aid and student payroll disbursements while cutting costs and lowering or eliminating student fees.

Prepaid Expo: Study Says Prepaid is Primed For International Expansion

Prepaid Expo: Study Says Prepaid is Primed For International Expansion
If there’s any truth to the old business adage, “You’re either growing or you’re dying, “ then the prepaid industry is living LARGE overseas!

I recently received some topline stats from Mercator Advisory Group’s inaugural Global Prepaid Card Market Potential Ranking (2010), and the numbers make a compelling case for crossing the pond.

While the U.S. prepaid market – with roughly $330B in loads since 2009 – will likely remain the undisputed 600lb gorilla for years to come, Mercator’s results indicate the rest of the world is primed for prepaid.

Travel cards in vogue as more Indians globetrot

Travel cards in vogue as more Indians globetrot - Money - DNA:
With more Indians travelling abroad, banks and card companies have sniffed a big opportunity. They are launching preloaded cards which travellers can use for shopping and other purposes overseas.

The cards stacked with multiple benefits provide an alternative to cash and traveller cheques. Since the cards are pre-loaded with the currency of the country the traveller is visiting, they protect against fluctuations in foreign exchange rates.

Prepaid grows more popular

Prepaid grows more popular Herald Sun
Shoppers, travellers, credit card holders and even parents of teenagers are cashing in on the growing trend.

Datamonitor senior analyst Harry Senlitonga says new research has found that Australians are bigger users of the variety of prepaid cards now available than the British but not as much as the Americans.
'The biggest user of prepaid cards in the US is the illegal immigrant, because they can't open a bank account,' he says.

Senlitonga says prepaid travel cards which can hold multiple currencies on one card have become popular, while major banks are introducing prepaid Visa and MasterCards.

Goodbye, checks: State governments move to paying by debit cards, direct deposit

Goodbye, checks: State governments move to paying by debit cards, direct deposit
Following the federal government's lead, state governments are migrating more payments -- for everything from unemployment to child support -- away from paper checks.

But while some experts hail the move to debit cards and direct deposit as safe and convenient for consumers, it also brings a list of rules, restrictions and fees that can trip up consumers who don't do their homework.

The movement away from getting government payments via checks is clear. The federal goverment soon will mandate that payments be received by direct deposit or debit card. For recipients of state benefits and state-administered payments, the same holds true: For many, debit cards and direct deposit are now the only ways to receive payments.

Pre-paid cards are great for debt-free spending - The Economic Times

Pre-paid cards are great for debt-free spending - The Economic Times
In today's society, the convenience, flexibility, security and benefits that payment cards offer have made them immensely popular. In addition to credit and debit card ., prepaid cards have also been steadily gaining in popularity.

What are prepaid cards?:

A prepaid card looks like a classic credit card , but works more like a debit card. There are no finance fees or interest since charges are deducted from a balance that you pre-pay. Coupled with guaranteed approval and the ability to withdraw money from ATMs, a pre-paid card is a great option for many consumers.

The concept of prepaid cards is really very simple. You open an account and “pre-load” the card with cash upfront, similar to a pre-paid calling card.

Once the balance is consumed by charges or ATM cash withdrawals, the card must be recharged with more funds via a cash deposit or wire transfer. In this way, you’ll never have any problems with spending more money than you can afford, and you avoid costly interest charges."

NovoTech hosts first prepaid card workshop in Riyadh

NovoTech hosts first prepaid card workshop in Riyadh Novotech AMEinfo.com
With the announcement of the guidelines for prepaid cards and payments expected in the next few weeks, Saudi Arabia is set to continue with the successful transformation of its largely cash based economy to electronic and card based transactions.

Colin Loubser, Chief Operating Officer of NovoTech, which is hosting the first prepaid card workshop ever in The Globe in Riyadh said "We recognised last year that the Kingdom would embrace prepaid cards and services and have been researching the market since then, looking for opportunities to support and service the financial services sector as they embrace this new industry.

Fed Proposes Prepaid Card Rules

Fed Proposes Prepaid Card Rules - Electronic Transactions Association:
The Federal Reserve Board on Monday announced proposed rules that would restrict the fees and expiration dates that may apply to gift cards. The rules would protect consumers from certain unexpected costs and would require that gift card terms and conditions be clearly stated

The proposed rules would prohibit dormancy, inactivity, and service fees on gift cards unless: (1) there has been at least one year of inactivity on the certificate or card; (2) no more than one such fee is charged per month; and (3) the consumer is given clear and conspicuous disclosures about the fees. Expiration dates for funds underlying gift cards must be at least five years after the date of issuance, or five years after the date when funds were last loaded

Green Dot Q3 profit beats Street, gives upbeat FY view

UPDATE 2-Green Dot Q3 profit beats Street, gives upbeat FY view Reuters
Prepaid debit card company Green Dot Corp (GDOT.N) reported a third-quarter profit that topped Wall Street estimates, boosted by a rise in card and interchange revenue, and forecast an 80 percent increase in gross dollar volume for 2010.

The top player in the prepaid debit card space also said it expects adjusted total operating revenue of $370 million and $380 million for the full year.
Full-year revenue should come in at the top end of that guidance, analyst John Kraft of DA Davidson said.

Companies like Green Dot and rival NetSpend (NTSP.O) -- which went public in July and October, respectively -- sell their cards to low-income consumers who rely heavily on cash and do not have much access to credit.

InComm Europe Named Best Prepaid Product Distributor

PR-CANADA.net - InComm Europe Named Best Prepaid Product Distributor
InComm, the leader in sales and marketing of prepaid products and innovator of transaction processing, won two coveted awards at the second annual Prepaid Awards in London: Best Prepaid Product Distributor; and Best Prepaid Gift Programme, for partnering with PrePay Solutions to develop the Vanilla MasterCard® Prepaid Gift Card.

The Prepaid Awards was created to celebrate innovation and best practice within the prepaid industry, and InComm's win in both categories validates InComm's position as the leading provider and distributor of gift cards in the UK and Europe. Winners were determined by a judging panel of independent experts with experience and insight into different aspects of the industry.

NetSpend IPO: Buzz Fueled by Greendot Success

NetSpend IPO: Buzz Fueled by Greendot Success -- Seeking Alpha
With roughly two million active cards as of June 30, 2010, NetSpend is the second largest US provider of general-purpose reloadable prepaid debit cards (GPR cards), which are primarily designed for the 60 million 'underbanked' customers in the US who lack full access to traditional checking and savings account. The company's customers are attracted to the card's convenience, lack of overdraft fees and minimum balances, and as many banks are turning away low-income customers, NetSpend cards represent an alternative to cash for many customers. With $7.6 billion of transactions made using its cards in 2009, representing a 40% share of this nascent market, NetSpend is one of the two clear leaders in this fast-growing space. Its $200 million IPO will follow in the footsteps of closest competitor Green Dot (GDOT), which had a very well received IPO in July. Goldman Sachs (GS), BofA Merrill Lynch (BAC) and William Blair are the lead underwriters on the NetSpend deal, which is one of five scheduled on the IPO calendar for the week of October 11.

First Gulf Bank & Citi announce Strategic Alliance

First Gulf Bank & Citi announce Strategic Alliance
First Gulf BankFirst Gulf Bank has today announced details of a strategic alliance with Citi® Prepaid Services, a division of Citi's Global Transaction Services, to provide Prepaid Payroll Card solutions to First Gulf Bank's Corporate Customers in the UAE. The service will be routed as a significant enhancement of FGBFGBFirst Gulf Bank's comprehensive payroll service, 'FirstPay'.
The arrangement involves issuance of prepaid payroll cards to employees of corporate clients of First Gulf Bank. The Payroll cards will be regularly loaded with payroll value for each employee and will enable an automated and friendly payroll process that complies with the Wages Protection System (WPS) regulations as stipulated by the Ministry of Labour in the UAE."

MasterCard Rivals Visa In Multi-Currency Prepaid Card Bid

mastercard-rivals-visa-multicurrency-prepaid - PaymentsSource Article
MasterCard Inc. has developed a prepaid card that can be loaded with multiple currencies, each stored in a separate account.

Strong prepaid payment card opportunity for India banks: survey

Strong prepaid payment card opportunity for India banks: survey
Indian consumers want to own and use prepaid payment cards, with eight out of 10 (84 per cent) planning to own such a product in the near future said a survey by Visa for the VRL Prepaid Summit South Asia 2010.

The survey found that while current prepaid payment card ownership in India was low at only 2 per cent, four out of ten respondents were aware of the product (40 per cent)

The survey asked 910 respondents from six major cities in India (Delhi, Mumbai, Chennai, Kolkata, Bangalore and Hyderabad) about their attitudes towards prepaid cards and the factors influencing their usage of the product.

Prepaid cards a new way to bank?

Prepaid cards a new way to bank?:
They carry fees, few protections, but reloadable cards are the hot financial product

You see them in almost every checkout line display, propped next to phone cards, iTunes cards and Olive Garden gift cards, emblazoned with the familiar Visa and MasterCard logos. But the reloadable prepaid cards with names such as Green Dot and NetSpend are much more than just another option for gift-giving. For a growing number of Americans, they're a new way to bank.

The appeal of prepaid cards
Analysts say the prepaid cards are one of the consumer banking industry's hottest new products. In 2009, $124.6 billion was loaded onto all types of prepaid cards, up 61 percent from 2008, according to Mercator Advisory Group. Just for open-loop cards -- those that can be used anywhere -- it projects transactions will soar to $308 billion in 2012.