PayPal's Prepaid Debit Card Makes Its Debut with 7-Eleven

The reloadable debit card PayPal Inc. introduced early this year has finally hit the streets.

Through a new deal negotiated through NetSpend Holdings Inc., PayPal's Prepaid MasterCard will appear first on retail store shelves at 7-Eleven, the companies said in a June 28 announcement. Other retail partnerships are in the works, PayPal said, but it did not specify any other chains that may carry the card.

Observers see the deal as a plus for NetSpend by enhancing its retail offerings, and also as a coup for PayPal to drive broader awareness of its card, which offers an array of traditional prepaid features plus hooks to other PayPal services for online shopping and other financial services.

"It seems like a decent move for retail distribution, which both NetSpend and PayPal need," Brian Riley, a senior analyst with TowerGroup, said in an interview. "But while it's a significant store brand, 7-Eleven isn't that large of a retailer so the impact of this one deal is not that huge."

Dallas-based 7-Eleven Inc. early this year announced a new partnership to sell NetSpend's cards alongside prepaid cards from Green Dot Corp., while expanding NetSpend's reload service to 7-Eleven's stores nationwide.

The convenience store aims to increase foot traffic and offer a broader range of choices of alternative financial services, Raja Doddala, 7-Eleven senior product director for services and business development, said in January.

PayPal's prepaid card brand "resonates" with consumers that want alternatives to traditional retail banking, Jesus Delgado-Jenkins, 7-Eleven's executive vice president for merchandising, marketing and logistics, said in the release.

The first inkling of PayPal's prepaid card plans emerged in February, when the eBay unit announced a partnership with NetSpend to distribute a prepaid MasterCard.

Wilmington, Del.-based Bancorp Bank issues PayPal's card.

PayPal's prepaid card can be used for in-store and online purchases. Reload fees vary, while loading funds from a PayPal account is free.

To fully unlock the PayPal prepaid card's online shopping capabilities, cardholders must link the card to a PayPal account.

PayPal charges consumers a $4.95 monthly fee for the card; ATM withdrawals are $1.95 each.

"7-Eleven is just the beginning for the PayPal prepaid card — we are excited to roll it out to additional brick-and-mortar retailers this year," Don Kingsborough, PayPal's vice president and general manager of retail and prepaid, said in the release.