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Prepaid Card Holdings Inc., which manages prepaid debit card programs for the underbanked through its subsidiary Bank Freedom, is now offering prepaid Visa Inc. cards.
Bank Freedom, of Irvine, Calif., has shipped about 75,000 MasterCard Inc. prepaid cards since it began offering them in March. Bruce Berman, the chairman and chief executive of the Las Vegas holding company, said it launched the Visa program to give consumers more choice and to protect the Bank Freedom brand.
"In different parts of the country people prefer Visa over MasterCard, or MasterCard over Visa," he said in an interview Thursday. "We certainly didn't want someone else to get" the rights to market a Visa prepaid card under a name like Bank Freedom.
The cards are issued by MetaBank, a unit of Meta Financial Group Inc. of Storm Lake, Iowa.
The Visa and MasterCard prepaid cards have identical fee structures. Bank Freedom does not charge fees for activation, issuance, or signature debit transactions, or for reloading the cards by direct deposit. People who do not have direct deposit to the card accounts pay a monthly fee of $4.95. Cash withdrawals from automated teller machines are $1.50 each, and PIN debit transactions cost 50 cents.
"Our research showed us that a lot of people used the check-cashing mentality of 'Let's gouge the underbanked' " for prepaid cards, Mr. Berman said. His company's lower fee structure, he said, is eventually "where the market is going to finish."
