New Card Helps Consumers Avoid Banks' Fees

November 9, 2011

A new prepaid card is being rolled out that aims to snag consumers who are tired of paying fees to banks and check cashers, too.

The FlexClear Prepaid MasterCard features include P2P money transfers, mobile payments, free check cashing and thousands of reload locations. The Tyburn Group, Inc., the Sausalito, CA firm behind the FlexClear card is said to have arrangements with numerous card load networks, including Green Dot, Allpoint, MoneyGram and Western Union. As an added benefit, FlexClear cardholders are automatically enrolled in a health care discount plan - something Tyburn claims is a first for the market.

"As large banks seek higher fees from consumers who use debit cards, reloadable prepaid cards such as FlexClear offer a way for people to manage and share their money in an easy, cost-effective, and secure way," said Deborah Davis, the Tyburn Group's CEO. "The FlexClear prepaid card has the security and consumer protection features that have historically only be available to consumers opening an account at the nearest branch of a traditional financial institution."

Prepaid cards, especially those branded by the major card companies have seen robust growth in recent years, outpacing all other types of card payments. Last year more than $148 billion was loaded onto these so-called "open loop" cards, according to Mercator Advisory Services, a Boston-based firm that tracks electronic payments trends. The 2010 prepaid load total represented a 19% increase over 2009 totals.

Tim Sloan, director of Mercator's prepaid advisory service, however, cautions the trend may not continue if the economy stagnates further and/or government disbursements slow. Large numbers of prepaid debit cards (EBT cards) are issued by state and federal government agencies; payroll distribution is another popular prepaid application, especially among the unbanked and undeserved.

53% of adults, worldwide, are unbanked

_{-Financial Access Initiative}