Tuesday, February 1, 2011
Bancorp Bank division becomes NetSpend's new issuer
On Jan. 31, 2011, NetSpend Holdings Inc. signed a multi-year agreement with The Bancorp Bank Payment Solutions Group, whereby The Bancorp Bank division will serve as NetSpend's new issuing bank for both new and existing card programs.
Netspend said it had been in discussions with The Bancorp Bank since October 2010, with the two companies performing mutual due diligence, program assessment and technical integration planning. The deal is part of NetSpend's strategy to diversify over 15 percent of the volume generated by its non-corporate, employer-issued prepaid debit cards to one or more banks by the second half of 2011.
It was in October 2010 that the Office of Thrift Supervision, a federal bank regulation agency, ordered prepaid card issuer MetaBank to discontinue its iAdvance loan program, which was being offered to consumers through NetSpend's general purpose reloadable (GPR) prepaid cards.
At the time, NetSpend said approximately 71 percent of its active prepaid debit cards were issued by MetaBank. Consequently, NetSpend said it might move its cards to another issuer.
NetSpend expects to begin issuing GPR cards through The Bancorp Bank in April 2011.
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