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The Green SheetGreen Sheet

The Green Sheet Online Edition

August 12, 2013 • Issue 13:08:01

Prepaid in brief

The Green Sheet, Inc. NEWS

Prepaid fees coming down

Financial services product comparison site CardHub.com issued annual research into the prepaid card industry that concludes card usage fees are down overall, but up in some categories. In its 2013 review, the Evolution Finance Inc.-owned site compared its findings to 2012 and found that fees on cards used primarily as alternative checking accounts had decreased by 46 percent, while cards employed principally as a check cashing alternative increased by 9 percent.

CardHub noted that the average number of fees per card is 10, with the highest being 18 for a NetSpend Holdings Co. managed card and one being the lowest for two American Express Co. products. The cost of prepaid cards for consumers varies greatly based on how cards are used, with annual costs ranging from $0 to $360, the site said.

Senators seek paycard investigation

On July 11, 2013, sixteen U.S. senators sent a letter to the Consumer Financial Protection Bureau and the Department of Labor that urges an investigation be made into the business practices of payroll card providers. In the wake of media coverage critical of the fee structures for paycards, the legislators voiced concerns that providers charge high fees that drain minimum wage workers of their pay and that those practices may violate consumer regulations.

In referencing the case of former McDonald's employee Natalie Gunshannon and the class action lawsuit that alleges a McDonald's franchisee forced Gunshannon to accept a paycard for the deposit of her pay, the senators urged the government agencies to undertake research to determine, among other things:

  • Whether workers understand paycard fees, such as for ATM withdrawals and balance inquiries
  • What aggregate effect fees have on employee income
  • Whether certain fees violate Regulation E of the Electronic Fund Transfer Act or the Fair Labor Standards Act
  • Whether the existing market "provides for adequate competition"

The legislators, including Senators Dick Durbin, D-Ill.; Richard Blumenthal, D-Conn.; Chuck Schumer, D-N.Y.; and Joe Manchin, D-W.Va., are also concerned with the commissions employers reportedly receive for signing up employees for paycard programs.

Cordray confirmation clouded

Richard Cordray was confirmed by the U.S. Senate as Director of the Consumer Financial Protection Bureau, the agency that oversees the financial services sector, including the prepaid card industry. Cordray's July 16, 2013, election to the five-year post at the fledgling agency comes amid more evidence that his initial appointment to the post may have been unconstitutional.

On July 17, the United States Court of Appeals for the Fourth Circuit in Richmond, Va., ruled that the so-called recess appointments of three National Labor Relations Board members made by President Obama on Jan. 4, 2012, were unconstitutional. That decision follows rulings in the district courts of the District of Columbia and Philadelphia earlier this year that Obama's appointments were unconstitutional because the appointments were made when the Senate was in session and not in recess.

The rulings may impact Cordray's appointment because Obama named him to the CFPB post on the same day he made the other appointments. With a separate case concerning the constitutionality of Cordray's appointment working its way through the federal court system, if his appointment is eventually ruled unconstitutional, the CFPB's actions to regulate the financial services industry may be invalidated. The U.S. Supreme Court has agreed to hear the NLRB case.

The Green Sheet, Inc. ANNOUNCEMENTS

AccountNow expands into retail

AccountNow Inc. expanded the distribution channel for its AccountNow Gold Visa Prepaid Cards via agreements with two grocery store chains: BI-LO LLC and Winn-Dixie Stores Inc. The deals mark the first time AccountNow-branded cards will be sold through brick-and-mortar retailers.

ACE Cash Express donates over $130K

ACE Cash Express Inc., a retailer of short-term loans, check cashing, bill payment and prepaid debit card services, donated more than $130,550 to national charities. The donation was part of the ACE Cash Express Give a Little Campaign. The charities include Big Brothers Big Sisters, Back on My Feet, AdoptAClassroom.org, Boys and Girls Club, Girls Inc., First Book and Junior Achievement.

Google Play gift cards launched in Germany

Germany-based prepaid card distributor and processor, epay, rolled out Google Play gift cards in over 5,600 food and discount stores across Germany. The Euronet Worldwide Inc. division said additional rollouts will include gas stations, drugstores, electronic stores and convenience stores throughout Germany. Consumers can use the cards to buy music, books, magazines and movies, as well as choose from over 975,000 apps in the search giant's Google Play store.

InComm offers Pre-Top

Prepaid card distributor InComm launched Pre-Top, a prepaid card platform that can be integrated into the websites of financial institutions and others to give accountholders and subscribers access to InComm's wide selection of prepaid products and services, including hundreds of digital gift cards redeemable for music, games, software downloads and wireless airtime.

Alberta receives emergency prepaid

InteliSpend Prepaid Solutions LLC, the prepaid card company owned by Maritz Holdings Inc., disbursed Visa Inc.-branded emergency aid cards to victims of recent flooding in the province of Alberta, Canada. InteliSpend said it was able to fulfill the Alberta government's request for the cards within 48 hours with help from mortgage firm Peoples Trust Co. and card personalization specialist Source One Direct.

Bieber takes teen card on the road

The SpendSmart Payments Co. launched a Meet & Greet Sweepstakes promotion for the "Believe" Summer 2013 tour of teen heartthrob Justin Bieber. Anyone who signed up for a SpendSmart prepaid card by July 21, 2013, was automatically entered into the sweepstakes for airfare, accommodations and two tickets to a Bieber concert and photographs with the celebrated SpendSmart spokesman.

Swagbucks.com enhances rewards store

Rewards and loyalty aggregation site Swagbucks.com upgraded its Rewards Store to offer national retailer gift cards. Users search the web to earn Swag Bucks points that are redeemed for merchandise, which now includes over 400 retailer-specific digital gift cards.

TransCard offers low-cost RUBY

TransCard LLC reported that it is now leasing the RUBY Gift Card self-service kiosk to shopping mall operators for $100 per month. The kiosks allow mall shoppers to purchase gift cards for use at shopping mall retailers.

Vendtek deals with Kitchen Food Fair

Vancouver, British Columbia-based prepaid card firm VendTek Systems Inc. signed a multiyear agreement to provide its Now Prepay suite of products – wireless, long distance, gift cards and financial products – in the 69 Kitchen Food Fair grocery locations throughout Toronto and other parts of Ontario.

The Green Sheet, Inc. PARTNERSHIPS

Blackhawk teams with brand engagement firms

Blackhawk Network, the prepaid card subsidiary of Safeway Inc., entered into individual commercial agreements with three digital loyalty and social reward platform providers: Ifeelgoods, Boomerang and Treater. Blackhawk said the companies will be able to leverage Blackhawk's digital platform and retailer partnerships to deliver e-gift and incentives to consumers.

MoneySafe cards launched in the Mediterranean

U.K.-based mobile payment and prepaid card processor Carta Worldwide and United Card Services Ltd. launched the MasterCard-branded Gold MoneySafe prepaid card in Greece and Cyprus. UCS said it was the first provider of instant-issue Prepaid MoneySafe MasterCard packs in those countries.

i2c to process for Heartland

Redwood City, Calif.-based i2c Inc. became the prepaid card processor for Princeton, N.J.-based ISO Heartland Payment Systems Inc. The partners' first collaboration is for the National Restaurant Association's Discover Financial Services-branded Edge payroll card program.

Premier to distribute Payteller kiosks

Payteller LLC, a self-service kiosk provider, signed an agreement that will allow ATM operator Premier Payment Solutions LLC to resell its kiosks. The kiosks offer prepaid cellular phone top-up, international long distance and bill payment solutions.

SelectCore to instant-issue for MasterCard

Canadian prepaid card processor SelectCore Ltd. entered into an agreement with MasterCard Worldwide to provide program management services for MasterCard-branded instant-issue promotional card programs in the Canada region.

SparkBase integrates with Dejavoo

SparkBase Inc. integrated its gift card and loyalty platform with the Dejavoo POS terminals of iPOS Systems. The terminals are used by merchants of EVO Payments International (the prepaid card arm of Long Island, N.Y.-based EVO Merchant Services LLC) and a SparkBase client. SparkBase said merchants that employ Dejavoo terminals for credit card processing now have the ability to sell gift cards and reward loyal customers.

The Green Sheet, Inc. ACQUISITIONS

TIO sets sights on Globex

TIO Networks Corp., a bill payment provider for the unbanked, entered into an agreement to acquire utility bill payment firm Globex Financial Services Inc. The transaction will reportedly be funded by a combination of cash, debt and $3 million in equity. TIO said the acquisition will strengthen the company's position in the bill payment industry and provide TIO with a national footprint.

The Green Sheet, Inc. APPOINTMENTS

Contact Solutions appoints new CEO

Automated customer service provider Contact Solutions LLC hired Michael Boustridge for the position of Chief Executive Officer. Boustridge was formerly President of BT Global Services. Contact Solutions said Boustridge's mission as its new CEO is to accelerate the company's growth via partner relationships, operational excellence and commercial market expansion.

Patel named Payza CCO

U.K.-based payroll platform and paycard provider Payza promoted Ferhan Patel as Chief Compliance Officer and Director of Global Risk and Compliance. Patel, who led the company's product development strategies, marketing operations, strategic alliances and new market opportunities, is tasked with overseeing Payza's anti-money laundering program, among other responsibilities. end of article

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