Virtually Prepaid

October 5, 2009

NetSpend Corp., a leading player in the prepaid card market, last week announced a set of products that provide under-banked Americans with a new online payment option, complete with financial management tools. The company's new virtual debit card is being made available to consumers who use prepaid MasterCard- and Visa-branded debit cards distributed by NetSpend through corporate customers and direct to consumers.

A 10-year-old firm headquartered in Austin, TX, NetSpend got its start in the prepaid card space by catering to the teen market. And as those early clients have matured, so, too, has the company's product line. In addition to Visa and MasterCard-branded plastic, NetSpend also supports proprietary (closed-loop) prepaid card programs and an online bill-pay service for "under-banked" Americans.

The company's new virtual card is intended as a additional card for existing MasterCard and Visa prepaid accounts that can be created or deleted on demand, using a PC or mobile telephone device.

"What we've seen in the 10 years we've served the under-banked consumer is that they typically manage their cash flow very carefully. As soon as they are paid, they pay their bills and other obligation -- evevry dollar counts and overspending simply isn't an option," Dan Henry, CEO at NetSpend, is quoted as saying in a press release. "The NetSpend virtual card and financial management tools bring a level of convenience and security that allows them to not only plan their spending, but monitor and safeguard their money as well."

The keystone of this new product offering appears to be the financial management and budgeting tools, which include visual spending reports, online budeting and budgeting report cards. NetSpend claims its new package of online products and services provide a level of confidence and security currently not available to as many as 100 million under-banked Americans.

The visual spending capability automatically categorizes expenses into easy-to-read pie charts. Taking that information a step further, the budgeting application and report card feature helps cardholders monitor spending throughout the month and provides reality checks on financial goals based on the cardholder's budgeting and spending habits.

More than 8,200 federally-insured financial institutions were collecting deposits and/or making loans to the U.S. "banking public" as of March 31, 2009.

_-FDIC