MetaBank's Nancy Schempp champions the underbanked in a tough economy

A two-year-long pandemic, a volatile market and a war in Europe create a lot of trepidation for the future. And MetaBank's Nancy Schempp says that while these issues are massive and far-reaching, many of the people feeling the pressure are the ones the financial services industry often overlooks.

MetaBank has a strong focus on issuing prepaid cards, which often provide a much-needed connection for the underbanked to engage in digital commerce. Such products are proving to be vital lifelines as more spending shifts online, but the users are suffering unprecedented financial strain due to the effects of multiple global crises.

"Who knows where the macroeconomics will go this year," said Nancy Schempp, senior vice president of partner services and delivery at MetaBank. "But one of the risks if we do go into a recession is the thousands of consumers who will be at risk for day-to-day costs, who will struggle with the prices of gas or food." 

Shempp is one of American Banker's Most Influential Women in Payments—Next, an award that highlights the roles that women under 40 are playing at payment companies and financial institutions. Schempp has been with MetaBank since 2014 and in her current role for just over one year. 

MetaBank is a banking-as-a-service provider for fintechs that sell prepaid cards and accounts; the U.S. Treasury Service used MetaBank's prepaid cards to disburse pandemic stimulus payments and tax firms use MetaBank to provide tax refunds, for example.

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Schempp, a South Dakota State University graduate, leads a team that works on onboarding, project management, account management, compliance and network operations as part of the firm's banking-as-a-service division. 

Meta no more

The company is in transition. The company changed its name to Pathward, a rebranding that's taking place during 2022 as part of a deal to sell its name to Facebook, which rebranded as Meta Platforms in 2021. 

The financial institution, which now calls itself Pathward in its contracts, will launch a new website and will execute the brand change for other departments during the remainder of the year. 

The institution's strategy as part of the rebrand is one of financial inclusion. In addition to its work with fintechs and third-party providers to provide payment services, it also works with underbanked consumers to support digital tax filing and refunds. It caters to small businesses by providing asset-based lending, equipment financing, insurance financing and other products. It also offers consumer lending. 

Prepaid cards are often the subject of regulatory scrutiny due to reports of technical glitches and card fraud as scammers use the cards for money laundering and other forms of payment crime. But prepaid products can also address use cases or consumers that don't easily fit into mainstream banking models, according to Shempp. In Canada, for example, prepaid cards are widely used to pay gig economy workers and for early wage access, despite 99% of Canadians having a bank account.

"Powering financial inclusion is rewarding," Schempp said. "Our and other financial services products provide value for consumers who can't get that from [legacy] financial institutions." 

Economic pressure

Inflation is at a near 40-year high, and companies that provide financial services to underserved communities are already preparing to manage the impacts of financial stress due to higher prices. Russia's invasion of Ukraine has also caused economic challenges, such as higher fuel costs, that have an impact on the price and availability of other goods.

These factors have caused the economy to slow down, which creates both challenges and opportunities for companies that offer prepaid cards and sell to consumers in underbanked markets. Green Dot, for example, is betting that economic pressure on fintechs will allow Green Dot to boost marketing and hire staff displaced from the fintechs. 

At MetaBank, Schempp's duties over the crises of the past three years have included managing the challenges that the company's partners faced. These concerns were often contradictory, as some clients struggled due to a nearly overnight collapse of sales volume while others had an opportunity for growth due to the sudden changes in the economy. 

"My role involved complex negotiations with many partners balancing the risks to the company with truly wanting to be a good business partner," Schempp said. "I learned to lean on others throughout this whole process. That includes the experts, such as my peers, leaders or team members, who helped make educated decisions about the portfolios"

Women have borne the brunt of the challenges over the past few years. Women have lost more than a million net jobs since 2020, according to the National Women's Law Center, noting men had recovered jobs faster than women. 

"We need to design real strategies to help women facing these issues find their own paths to success," Schempp said.

During her career, Schempp has been director of product management and vice president of strategic analytics and portfolio management. At Sanford Health she was senior marketing insights strategist. Other financial services roles include product and strategy roles at Great Western Bank and business analysis supervisor at Citigroup, among other jobs. 

Payments, like many industries, is backed by a strong, vital female workforce, she said. Viewing payments as a male-dominated industry falsely gives the sense that men are the driving force behind much of the activity, she said.