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Making bank for the underbanked turns out to be a really good business lately. In a generous year for investors in the publicly-traded markets, firms serving the underbanked have far outpaced their brethren in the S&P 500.
In my unscientific non-weighted analysis of returns for the fourteen months (approximately)
People in prepaid often extol the virtue of innovation, but sometimes we forget that these new ideas are only an enhancement to the product if they help consumers.
Chase just announced one of those "innovations" this week. It is going to put an "instant issue" machine in its branches which can create a personalized card in seconds. Think about that for a second, because it is pretty big. With this technology, Chase can put a fully functional prepaid card in the hands
In a transaction that probably reflects the increasing priority for prepaid card program managers to lower their customer acquisition costs, AccountNow has announced that it intends to buy nFinanSe. Most likely, the key value for AccountNow, a mid-sized prepaid PM whose cards are marketed over the internet, is to gain the foothold established by nFinanSe in several national retail stores.
nFinanSe is a small prepaid card program manager whose relative anonymity obscured its excellent offering. AccountNow, by contrast, is a relatively large PM whose stumbling block to gaining market share has been its lack of presence in any
Given that a number of people have reacted with - let's nicely call it curiousity - to the news about Republic's proposed credit product, I want to spend a few moments going over details in their October 18th filing which
should add some clarity to their business plans.
Setting Up the Background
As a pretext to that, it is important to understand the specifics of Republic Bank's corporate structure.
There are three names within the Republic Bank universe. The parent institution is Republic Bancorp.
It has two subsidiaries: Republic Bank & Trust and Republic Bank.
Owing to an expectation that their product would never escape the ire of regulators, investors have pulled out from Tandem Money. The company appears to have closed at the end of last month.
"Tandem Money is no more," said Insight Card Services CEO Bill Smith. "We decided not to continue. We had a hard time seeing how the product would handle the scrutiny."
Tandem Money was more than just a prepaid card with a line of credit. It offered a suite of financial services on a
Given that prepaid debit cards have changed a lot in recent years and given that there is an expectation that they will continue to change rapidly in the future, one of the most important conversations about the product tends to be around future innovation. The questions of how and if credit will be adopted on prepaid is most closely linked to innovation, but there are better blue oceans to explore. In the last few years, no innovation has disrupted more
NetSpend: Dan Henry will now get four years of salary if and when he steps down from his CEO position. Henry earns a salary of $410,500. As well, options for 608,000 shares in NetSpend common stock will immediately vest at a strike price of $3.53. Were that to happen today, that portion of Henry's options would have a value of
Everyone seems to have forgotten an important thing about American Express prepaid debit cards.
They cannot accept a federal benefits payment.
I think that investors and the press have both over-reacted to the news of Amex's new contract with Wal-Mart to put their Bluebird prepaid cards on the shelves of the world's largest retailer. Immediately after opening, Green Dot shares fell fifteen