BBVA Compass’ decision to start issuing its own reloadable prepaid debit card eventually may help the bank earn revenue from cardholders who want to share an account with other individuals, including those living in other countries, one analyst observes.
The Birmingham, Alabama-based bank, a subsidiary of Spain-based Banco Bilbao Vizcaya Argentaria, on Aug. 3 launched the Visa-branded SafeSpend card and is offering it to new and existing customers.
Cardholders may load the card account through a BBVA Compass checking account, which might help make the product more attractive to consumers who want to send funds to other individuals, says Madeline Aufseeser, a senior analyst at Aite Group. The bank charges $4 for additional cards, she notes.
If a cardholder decides to send a card to someone outside the U.S., BBVA could bring in additional revenue through fees. The bank charges a $3 foreign ATM transaction and 3% of the U.S. dollar amount on purchase transactions.
“I doubt they would follow the [Federal Reserve’s] three [prepaid card] exceptions because there is a huge opportunity [to use the card as a money-transfer tool],” Aufseeser tells PaymentsSource. “I would expect [BBVA] to get active in that space.”
To claim exemption status for their prepaid cards under the Fed’s new debit-rate rule, issuers must not allow cardholders to access funds in a card account using a check, the automated clearinghouse system, wire transfers or other methods (
Among the card features are direct deposit, a bill-payment service and online banking access. BBVA Compass expects eventually to add more features, such as enabling cardholders to reload their card account at ATMs, Joel Alindogan, the issuer’s director of payments group, tells PaymentsSource.
BBVA Compass partly is marketing the card to the parents of young college students. That has become a growing consumer segment since the Credit Card Accountability, Responsibility and Disclosure Act banned credit card solicitations on college campuses, Aufseeser notes.
“When we designed the product, we did so to address growing customer needs,” he says.
The bank also designed the card for financially underserved consumers and existing customers having trouble with overdraft fees, Aufseeser adds.
The initial funds load costs $4. Additional loads at BBVA Compass locations are free. Cardholders also may reload the card at Visa ReadyLink locations. Retailers who provide the service may apply a fee.
BBVA Compass also charges cardholders a $4 monthly maintenance fee. “We believe the fee is fair and very competitive compared with the rest of the market,” Alindogan says.
BBVA Compass does not charge for the first ATM withdrawal each month. Each additional withdrawal cost $1.
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