ORLANDO — Bankers and prepaid card executives defended the industry's much-criticized fees on Wednesday, saying that prices and practices have improved as the industry has matured.
"It's gotten so much better than it was three or four years ago," John Barbella, a senior vice president with The Bancorp (TBBK), said during a panel discussion on Wednesday morning.
He cited Wal-Mart's (WMT) 2009 decision to drop the price of its prepaid cards, to $3 for each upfront purchase, reload and monthly usage, as a turning point in the prepaid industry's average fees.
Other panel members also defended the prepaid industry's fees against the criticisms of consumer advocates, who have argued that banks and prepaid companies gouge customers who could get cheaper, similar services at credit unions and other financial institutions.
"Consumer groups get so wrapped around fees," said Tim Sloane, the director of prepaid advisory services at Mercator Advisory Group.
But, he added, convenience is also a factor that many consumers take into account when deciding whether to use prepaid cards and pay the fees. For example, is it better to argue that consumers "should walk three miles, they should get on a bus …. to go to a credit union that doesn't exist in their neighborhood?"
Sloane and Barbella were speaking during the Card Forum and Expo, an annual conference sponsored by American Banker and its publisher, SourceMedia.