H&R Block Inc. has switched from Visa U.S.A Inc. to MasterCard Inc. as the network for its prepaid cards, which the tax-preparation giant is now offering through its own bank.
The move, which H&R Block revealed to American Banker this week, came amid fierce competition between the networks to win a bigger chunk of the prepaid sector.
Last tax season the Kansas City, Mo., company allowed its customers to receive their tax refunds or refund-anticipation loans on prepaid cards issued by BankFirst of Sioux Falls, S.D. Those cards run on the Visa network.
In March the Office of Thrift Supervision approved H&R Block's application for a savings bank charter.
On Monday, Kevin Morrison, H&R Block's director of card services, said the company decided to go with MasterCard in September. Neither he nor Kate O'Neill Rauber, a spokeswoman for H&R Block, would divulge any other details.
Barbara Coleman, a MasterCard spokeswoman, said the Purchase, N.Y., company typically lets its partners announce new partnerships. A Visa spokeswoman, Jennifer Doidge, said it does not discuss partnerships.
Last month, H&R Block began offering the Instant Money Advance Loan, for up to $1,500, which applicants can get by estimating their anticipated 2006 tax refund and showing a pay stub as proof of their ability to repay. The loan proceeds can be received on the prepaid card, though unlike Block's refund-anticipation loans, the Instant Money Advance Loan is not secured with the refund.
Separately, H&R Block announced Tuesday that it would contribute $10 to $20 to the college savings plans of customers who use a Futuretrust MasterCard to pay for tax preparation at certain offices. (Barclays Bank Delaware in Wilmington, a unit of Barclays PLC, issues the Futuretrust cards.)
On Monday, MasterCard announced a deal with Interactive Communications International Inc., an Atlanta marketer of prepaid cards. As American Banker reported last week, that partnership would allow consumers to add funds on MasterCard or Maestro-branded reloadable prepaid cards at retail locations where InComm sells its prepaid products. If all 145,000 locations signed up, this would make reloading available at more locations through a single company and network than any other so far.
Until recently, Green Dot Corp., an issuer of prepaid products, operated the only reloadable card network that was open to other issuers. InComm, for instance, used the Green Dot network to reload its Mio prepaid cards and will continue to use the Green Dot network at its 50,000 merchant locations.
MasterCard and InComm inaugurated their partnership on Monday at an Indiana convenience store with 148 locations, Village Pantry, a division of Marsh Grocery, one of InComm's clients for prepaid cards.
Galileo Processing is InComm's processor and BankFirst its acquiring bank.
Two weeks ago Visa became the first major national network to break into the reloadable card market when it signed a deal with Blackhawk Marketing Service, the prepaid card unit of Safeway Stores Inc.
Blackhawk, which markets cards on behalf of 100 merchants as well as its parent company, has installed the reload-enabled terminals at 1,550 Safeway stores, but not at any of its other merchants.
