During these difficult economic times, prepaid cards are becoming more popular and Business Solutions, a subsidiary of the American Bankers Association, is offering a new program that lets the smaller community banks offer customers a variety of Prepaid MasterCard card products, including general purpose reloadable, payroll and gift cards.
In a partnership with TransCard and MasterCard Worldwide, Business Solutions has created the Community Bank Prepaid Program. The Prepaid Program assists community banks in issuing Prepaid MasterCard cards to a large and untapped customer base. This is a whole new revenue stream for the Community Banks increasing their competitiveness on the playing field. To boot, customer deposits made to these prepaid cards will count in the overall deposits for the bank. The FDIC-insured prepaid cards can be used for payroll, assistance for college students or just helping teenagers with budgeting and finance. Expensive check cashing services and the need to carry large amounts of cash are a thing of the past. The prepaid cards can be replaced if lost or stolen.
William Kroll, president of Business Solutions offered:
“This is a real opportunity for banks to expand their revenue by reaching out to members of the under-banked community, who have expressed a desire to have more control of their money. It also offers bank customers a safe way to teach their teenage and college-age children how to budget their finances.”
TransCard CEO Craig Fuller added:
“This program eliminates the traditional barriers of entry for banks to become prepaid issuers. TransCard will provide banks with a turn-key, bank branded, prepaid program that can expand their deposit base, create new offerings to their retail base and establish prepaid products for their treasury relationships.”
MasterCard Worldwide commissioned a 2010 study by the Boston Consulting Group that reported total global prepaid spending will reach and estimated $840 billion by 2017 with nearly $442 billion expected to be spent in the U.S.
Given the acceleration of this trend, the Community Bank Prepaid Program is an affordable and efficient way for community banks to benefit. Bank customers are offered cards that have a virtually 100 percent approval rate for their users and no risk of overdraft fees. Commercial clients also realize efficiency by paying employees with prepaid payroll cards that are more cost-effective and convenient than issuing paychecks which can cost employees time and money to cash. Employee card holders will now have immediate, 24-hour access to their money.
Cardholders will also be able to use their smart phones to pay bills, check balances and receive text messages for account transactions and balance inquiries. Members of the under-banked community, who comprise approximately 25 percent of Americans according to a 2009 FDIC survey, and have expressed a desire to use banks so they can have better insight and management over their personal finances.
To learn more about the Community Bank Prepaid Program, visit www.aba.com/prepaidcards or contact David Ridley at 202-663-7589 or 1-800-BANKERS.
For more information on TransCard, please visit www.transcard.com.
The American Bankers Association represents banks of all sizes and charters and is the voice for the nation’s $13 trillion banking industry and its 2 million employees. The majority of ABA’s members are banks with less than $165 million in assets. Learn more at www.aba.com.