With profit margins as high as 40 percent, prepaid phone cards aren't just customer marketing tools, but also proven money-makers.
Distribution of the cards in banks was boosted recently by an alliance between BLT Technologies and TransAlliance, a Washington state- based leader in electronic funds transfer technology. TransAlliance is marketing the cards to 800 western U.S. banks and financial institutions. BLT, a pioneer in phone card technology with alliances with several other transfer tech firms, is providing the phone time. "When banks sell this card, they are buying at a wholesale rate and selling at a retail rate, and the difference between them becomes a new source of profit," says Denny Dumler, president and CEO of TransAlliance. The wholesale rate will be determined by a bank's financial commitment to the card provider: The more minutes the bank buys, the lower the cost.