Reduce liability for losses on commercial accounts by adhering to four requirements.
Another Battle Brewing?
With all the battles bankers are having to wage these days against over-regulation, credit union mission creep and too-big-to-fail competitive disadvantages, it is no surprise that the increased use of prepaid cards is not a hot topic of conversation. But it still warrants attention, especially considering some recent big prepaid card announcements.
You have probably heard about Bluebird, a partnership between Wal-Mart and American Express. Bluebird, which is promoted as a checking and debit alternative, features direct deposit, free ATM access (with direct deposit), bill pay, family sub accounts and membership benefits from American Express. Bluebird also offers no annual fees, no monthly fees, no overdraft fees, no minimum balance fees, no card replacement fees and no foreign exchange fees.
Another partnership, also announced last year, is Chexar and Visa. The companies have partnered to allow prepaid users to deposit paper checks to their reloadable Visa prepaid cards using mobile remote deposit capture. The platform will support check deposits to Visa cards; funds transfers between direct deposit accounts and payment cards; person-to-person payments; and bill payment services, whether in-person, online, on a mobile device or at an ATM.
Now, some say they are not worried about losing customers to prepaid cards because they are primarily used by the unbanked, not current bank customers. Similarly, I have read articles arguing Bluebird is just a way for Wal-Mart to compete against the big banks for unbanked services. On the other hand, I have also heard speakers at industry events tell community bankers to be aware of these partnerships because they may steal customer services away from traditional banks.
Whom you choose to believe is up to you. I just think it is important to be aware of the potential threats. But if you feel compelled to do so, it might not hurt to remind customers why the bank is better than prepaid (FDIC insurance, earning interest, building credit) so you do not have to fight yet another battle in the future — a battle to win customers back. Click on the link below to learn more about Bluebird and the Chexar/Visa partnerships.
Kari English is senior editor of BankNews.
Copyright (c) January 2013 by BankNews Media