TAMPA, Fla. -- A tightening economy has pushers of prepaid cash cards circling a growing market that's without bank accounts and credit cards, according to a report in the Chicago Sun-Times.
"There are going to be more people pulling out of the traditional banking system," Jerry R. Welch, chairman and CEO of nFinanSe, told the newspaper. nFinanSe is a Tampa, Fla.-based operation that last year introduced a lower-cost prepaid cash card.
Such cards are essentially serving as portable bank accounts for the unbanked and underbankedabout 80 million in this countryas [image-nocss] well as millions more who have lost their credit cards in the crunch but still want plastic for convenience.
Underserved consumers have about $1 trillion annual income and pay about $1 billion each year in check-cashing fees, according to Visa, which last week announced a deal to allow customers to add cash to their prepaid cards at U.S. MoneyGram locations.
Last month, Wal-Mart Stores Inc. lowered the fees on its 2-year-old prepaid Visa card in a bid for more business.
Still, Welch says nFinanSe's lower feescarrying a $5.95 retail price and charging $2.95 monthly and reloading feeswill give it an edge with the budget-conscious. The Wal-Mart card costs about $8.94 to purchase, $4.94 for monthly maintenance and $4.64 for each cash reload, while MasterCard and Visa card products in convenience stores, drugstores and grocery stores are $9.95 to $14.95 to purchase, with $4.95 monthly and reloading fees.
Dollar General stores recently began carrying nFinanSe's Discover Network-branded cards, which are activated and issued on the spot, unlike most cards in the market, which can take up to 10 days to be delivered to the user, according to the report. The cards also tout text updates, instant reloading and a free 24-hour customer-service line.
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