Hoping to differentiate its product, Whitebox Partners LLC has developed a reloadable prepaid card with a rewards program, a feature usually associated with credit and debit cards.

Whitebox is positioning its general-purpose prepaid cards as mainstream financial products, and Doug Bobenhouse, the president of Whitebox, the new prepaid card division of the processor Total Card Inc., said it wanted to develop a prepaid card with features that are comparable to other mainstream products.

"From a strategy standpoint, we wanted to see what kind of ground was still available, rather than just entering the market with something similar to what was already out there," Bobenhouse said. "We believe this is a program that exceeds consumers' expectations if you compare it with a traditional demand deposit account."

Consumers who use the Visa Inc.-branded Jump Card will earn one rewards point for every $1 they spend on signature transactions. Cardholders receive 2,500 points if they link the card to direct deposit and an additional 750 points for any deposit of $750 or more.

Points are redeemable for retailer gift cards, cash back, airfare on certain airlines and various household items that are offered in a catalog.

The card also features online money management tools that can help people keep track of their purchases and set up monthly budgets.

Bobenhouse has some experience in developing prepaid rewards programs. Before joining Whitebox last year, he was behind the development of a prepaid rewards program designed for video gamers for Prepaid Solutions USA.

The Jump Card is available online, but Whitebox is not yet promoting it. The company will start some e-mail marketing next week and plans to use other methods in the next two weeks, Bobenhouse said.

Whitebox is treating the Jump Card as its flagship product and will develop other general-purpose cards based on this initial model.

Arroweye Solutions, a Chicago card manufacturer and marketer, is working with Whitebox on the product. Arroweye can print fully customized cards on demand. The partnership "drastically reduces the length of our supply chain and eliminates our inventory risk," Bobenhouse said.

Though the Jump Card is available in only one color now, Whitebox will eventually enable cardholders to customize their cards with other colors, designs, pictures and user-created images, Bobenhouse said.

The Bancorp Inc.'s Bancorp Bank issues the card, and i2c Inc. processes the transactions.

Users pay $8 to buy the card and an $8 monthly account-maintenance fee.

Bobenhouse admits that some people might think the fees are on the high side, but "we think we have a significantly stronger value proposition with the rewards program and money management tool," he said.

One free automated teller machine withdrawal is included with each direct deposit, but a $1.50 fee applies to each additional withdrawal.

William H. McCracken, the chief executive of Synergistics Research Corp., said Whitebox needs to identify a specific target market. "The challenge with a rewards program for prepaid cards is understanding who your customer base is," he said.

Reloadable prepaid cards traditionally are marketed to unbanked and underbanked consumers, McCracken said.

"The question is how receptive is this segment to rewards if it results in slightly higher fees," he said.

If Whitebox is targeting more-affluent consumers, then "what is the change in consumer perception that is going to make everyday use of a stored-value card the preferred product over the current credit and debit products they are using?" he asked.

Consumers 18 to 21 might benefit from such a card because of the Credit Card Accountability, Responsibility and Disclosure Act, McCracken said. "Right now, card providers are thinking about what to do with this group."

Under the law, which takes effect later this month, credit card issuers will be banned from issuing cards to anyone younger than 21 unless they have adult co-signers on the accounts or can show proof that they have enough income to repay the card debt.

"Maybe this card can be an alternative for the college-age crowd," McCracken said.

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