Does Everything Require Stimulus?

By Jerry R. Welch
nFinanSe, Inc.
As posted on The Huffington Post

A pilot program approved by the FDIC Board of Directors yesterday to evaluate the feasibility of offering no-frills, low-cost checking and savings accounts is an interesting idea. The program is designed to help millions of “unbanked” and “underbanked” Americans regain trust in the banking system, and develop a relationship with a financial services provider. On the one hand, although well intentioned, this strikes me as “too little and too late.”

On the other hand, there’s already an answer for this serious problem in the relatively new, but high-growth reloadable prepaid debit card industry. These cards are essentially portable bank accounts and are the solution for a growing number of people. A reloadable prepaid debit card can be purchased for as little as $3, and consumers can even load their paychecks onto these cards for free. The prepaid card industry is in the business of catering to this underserved population and is growing very rapidly as a result.

An article in yesterday’s USA Today (“Many shun bank accounts but pay more for financial services”) calls attention to the program and quotes numbers from an FDIC study in 2009 which found that nearly 8 percent of U.S. households or 17 million people are unbanked and don’t have bank accounts. An additional 43 million people are underbanked. That means they have bank accounts but often fall victim to expensive financial alternatives outside the mainstream such as check-cashing services, pawn shops and pay day lenders.

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August 11th, 2010|Categories: Client News|Tags: , , , , , , , , |

Las Vegas Business Press: For underbanked, prepaid cards may offer convenience

By John G. Edwards
Las Vegas Business Press

Do you use a rubber band and your pocket rather than a bank account to store cash?

Or do you hide money under the mattress? Are you too busy to balance your checking account? Want to give your kid in college a debit card with limited balances? Need a safe way to carry cash for a trip?

If you answered “yes” to any of these questions, Nevada Federal Credit Union and some of the country’s biggest retailers have a product designed for you. It’s a prepaid debit card. It functions similarly to a standard bank debit or ATM card. Unlike a checking account, however, you can’t be dinged for bounced checks, because prepaid debit cards don’t cover purchases for more than the amount.

“It’s like a bank account in your pocket,” said Jerry Welch, chairman and chief executive officer of nFinanSe of Tampa, Fla.
He runs a startup company that offers prepaid debit cards and spoke to me during a recent trade association conference in Las Vegas. A nFinanSe spokeswoman said the company sells its prepaid cards in Nevada through Coinstar, which has vending machines that convert coins into paper money.

Welch sees a giant market for his debit card products. A 2009 government survey shows that 30 million households or about 60 million adults are unbanked or underbanked. Underbanked households include those who have a bank account but use check cashing services, payday loans, rent to own or pawnshops.

Click here to access the full article

March 22nd, 2010|Categories: Client News|Tags: , , , , |