Catalina Card Services Inc. is trying to differentiate itself in the crowded general-purpose prepaid debit card market with a product that offers cardholders low-cost mobile phone services.
The Danville, Calif., prepaid card provider has an agreement with Simple Mobile Inc. that lets cardholders sign up for an unlimited talk, text and Internet-access plan for $45 per month, a $15 monthly discount from what Simple charges other consumers for the same package. Simple Mobile deducts the monthly bill from the cardholder's prepaid account.
The offer is needed to help Catalina compete with better-known prepaid providers and to create stickiness for its InFusion card, which was introduced Jan. 11, according to Matt Montes, Catalina's president. "You're always looking for ways to add value and persistent use to these cards," he said.
The Simple Mobile offer is to be available next month, after Catalina switches from Galileo Processing Inc. to Fidelity National Information Services Inc. for transaction processing. Meta Financial Group Inc.'s MetaBank issues the cards.
Montes, who founded the prepaid marketer AccountNow Inc., saw more people use that company's cards when it added mobile minute top-ups. Most consumers' monthly spending went to mobile services, he said. Catalina plans to add services such as discounted automobile insurance. As with the Simple Mobile deal, Montes said, he wants to negotiate lower rates for InFusion cardholders. "We have to do things that distinguish ourselves from the competitors out there and give more value," he said.
Brian Riley, a research director in the bank cards practice at TowerGroup, said, "A big challenge in the industry at the moment is building long-term use of these cards." Catalina's mobile phone setup "is a step in the right direction," he said.
