s ISOs and merchant level salespeople (MLSs), you know your careers are challenging. Competition is fierce, and you must be quick on your feet. At times you may become discouraged and feel that not only is the pie not getting any larger, but also your piece is getting a bit smaller.

Enter NetSpend Corp., a provider of prepaid debit cards for America's cash-based consumers. This nimble industry leader is opening up its products for the first time to ISOs, giving you a chance to reach a new market, the $1 trillion prepaid market, and get a larger piece of the pie.

Since its inception, NetSpend, headquartered in Austin, Texas, has originated more than 1 million cardholder accounts, and its active accounts initiate more than $1.5 billion in purchases and cash withdrawals annually.

In addition to enjoying financial success, NetSpend has been recognized by the business community. In 2003, the company received the NASBIC Portfolio Company of the Year Award from the U.S. Small Business Administration. The following year, co-founders and brothers Roy and Bertrand Sosa were honored with the 2004 Ernst & Young Entrepreneur of the Year Award.

Providing access, convenience and security

Roy and Bertrand Sosa founded NetSpend in 1999. They now employ approximately 200 people. "We had a vision to level the playing field for the millions of people historically ignored by traditional financial service providers," said Bertrand Sosa, Co-Founder and Vice President of Advertising and Brand Development.

"We provide access, convenience and security to cash-based customers while delivering equivalent economic citizenship in an economy that is increasingly dominated by plastic. We don't think of ourselves as in the card business, but in the business of providing financial empowerment."

NetSpend offers a vertically integrated product for prepaid payment applications including customer acquisition, risk management, card fulfillment and customer service.

"While our national bank partners are the issuers of the prepaid cards and we do not handle the funds or own the accounts, we handle pretty much everything else," Bertrand said. "We run the network, we authorize and decline transactions, we activate cards and we hold the database."

And the venture's been very successful. In 2005, the company processed $1.5 billion in transaction volume. "From single operators, to convenience stores, to grocery stores, to check cashers and anywhere in between, we've been able to drive a successful program," said Roy Sosa, NetSpend's President and Co-Founder.

"A host of partnerships with issuers, card Associations, EFT switches and retail outlets, such as financial service centers and grocery stores, has helped make this possible."

More than just a card

NetSpend launched its flagship products, the federally insured All-Access MasterCard and Visa Prepaid Card, in 2001. Its prepaid cards are sold through thousands of retailers across the nation, including check-cashing chains and small and large grocery stores.

Since the cards are prepaid, cardholders don't risk going into debt or paying overdraft or NSF fees. They can also benefit from NetSpend's All-Access Alerts, which are text messages delivered via mobile phone that provide instant confirmation of the date, time, location and amount of each transaction, as well as remaining card balance.

NetSpend has also launched other programs. One is the All-Access Direct program, which debuted in 2003. This program enables customers to load money onto a prepaid debit card using direct deposit. In 2004, NetSpend launched the All-Access Visa Gift Card, a non-reloadable prepaid card, or gift card.

In 2005, the company launched the All-Access National Savings Program, which is a first-of-its-kind prepaid debit card program that links the All-Access prepaid debit card to an FDIC-insured, interest-bearing savings account.

70 million ... and growing

Seventy million Americans do not have traditional banking relationships. The reasons for this are varied: They may suffer from bad credit or no credit, or they may find that traditional banking hours are not convenient.

Whatever the reason, NetSpend provides services to these customers. "NetSpend is guided by three simple principles of providing access, convenience and security to its cash-based customers," Roy said.

NetSpend's research shows that the cash-based market segment is comprised of individuals who are 18 to 34 years old and is divided equally among Hispanics, African Americans and Caucasians. "The average income is $32,000. It really is hard-working middle America," Bertrand said. As an example, research has shown that 7% of transactions in America are conducted at Wal-Mart. That parallels NetSpend's transactions, 7% of which go to Wal-Mart as well.

The Sosas also report that customers like these cards because they are easy to use and don't require a change to daily routines or activities.

NetSpend customers continue to shop at their favorite stores without additional effort. "They purchase the cards through retail locations, in the 15 to 20 minutes they have while running errands," Bertrand said.

Here's how it works: Customers purchase a temporary card for $9.95 at a participating location.

At that time, they can load any amount of money on the card. Then they activate the card by calling a toll-free number or visiting the NetSpend Web site. They select a PIN, and NetSpend performs the necessary compliance checks as required by law.

"It takes less than 60 seconds," Roy said. "In a week he will receive a personalized card in the mail with his name embossed on the card." Customers can add money to the card at any of the 6,000 locations where NetSpend cards are sold. ISOs earn revenue from the initial card purchase, the load fee and transaction fees.

Highest number of prepaid cards in circulation

NetSpend's partnerships include companies serving the cash-based markets, such as check cashers, grocery stores, convenience stores and wireless kiosks. The company also has strategic relationships with card issuers, EFT networks and payment card Asociations.

"Partnering with NetSpend means increased revenue that flows straight to the bottom line," Bertrand said. "NetSpend has the highest number of active prepaid cards in circulation and the highest dollar volume loaded. It also pays some of the highest commissions to its partners."

Partner processors earn a residual stream of income from both the load and transaction fees.

"NetSpend's solutions are easy to implement and can be customized to the individual needs of its partner processors," Roy said. "Partner processors can sell private label or company branded prepaid reloadable and non-reloadable cards."

A partnership opportunity for ISOs

All NetSpend products offer revenue-earning opportunities for NetSpend partners, which now include ISOs. "Traditionally, we worked directly with retailers.

"Now, the demand is so high that for us to do justice to the market we need to go beyond the direct model, and we are looking to partner with ISOs," said Bertrand, who is revealing, in this article, this new opportunity to readers of The Green Sheet before the rest of the industry.

"We are looking to the ISO world for a way to expand our reach," he said. "It is important for NetSpend to partner with ISOs." In particular, they're interested in partnering with ISOs who call on mom-and-pop stores and cultural retailers. ISOs can earn money several ways with NetSpend. When a card is initially purchased for $9.95, the ISO earns a one-time commission. "Of the $9.95, most goes to the retailer and the ISO," Roy said. Then, when money is loaded onto the card, the ISO may share a portion of the load fee with the retailer.

NetSpend does not keep any portion of the load fees. "Some retailers charge nothing; some charge $3," Roy said. "In the end, the ISO and the retailer determine how to split that fee. The ISO and the retailers form an agreement." ISOs also earn revenue when cards are used in transactions.

"The recurring revenue is extremely appealing," said Bertrand, acknowledging that ISOs and MLSs, who work in this industry every day, are familiar with the benefits of this type of income stream. "ISOs don't have to reinvent the wheel." Another big plus: There is no start-up cost.

Retailers benefit too

NetSpend understands that retailers are an important part of the consumer relationship, and they reward them accordingly.

The company offers card co-branding and currently has co-branded cards with HEB grocery stores as well as some check cashing chains, including ACE Cash Express. It also offers incentive bonuses for front-line personnel, which make the NetSpend products that much easier for ISOs and MLSs to sell to existing and new clients.

"From a customer standpoint, it means that partner processors have a powerful product for building long-term relationships with their customers," Bertrand said. Also, retailers benefit from increased customer loyalty.

NetSpend is committed to customer service for both end users and partners. "We have two separately dedicated customer-service teams: one that handles all partner questions and issues and one that addresses all customer questions and issues," Roy said.

These teams are available seven days a week: 8 a.m. to 10 p.m. CST Monday through Friday, and 8 a.m. to 8 p.m. CST on weekends. Customers also have access to the NetSpend corporate Web site and integrated voice response system 24/7.

If you're an ISO interested in accessing the 70 million Americans without bank accounts and increasing your residuals and commissions, NetSpend would like to talk with you. The Sosas' goal is to establish relationships with me chants and end users, and they understand that ISOs and MLSs can help them do that.

"We aren't looking to make money off cards, but to build relationships with customers and merchants," Bertrand said. "Our success hinges on [our] ability to understand ISOs and customers."