[IMGCAP(1)]
Urban Trust Bank, a black-owned financial institution, has signed a multiyear agreement with Visa Inc. in which Urban Trust will issue a reloadable, Visa-branded prepaid card that targets the large and potentially lucrative underbanked market.
Urban Trust, which is based in Lake Mary, Fla., expects to begin offering the Urban Trust Success card in the third quarter to the bank's existing customer base and potential customers at 24 branches in Central Florida and Maryland, the bank announced last week. Urban Trust also will market the card online because it also wants to sell the card nationally.
The bank recently opened nine branches in Florida housed in Wal-mart stores, Nancy Port Schwalb, an Urban Trust spokesperson, tells ATM&Debit News.
Customers can reload funds into their card accounts through ReadyLink, Visa's prepaid reload network. ReadyLink has nearly 50,000 participating merchant locations nationwide, says Kimberly L. Axelrod, a Visa spokesperson.
The bank has not yet disclosed the fees it will apply to the card and which company will process the transactions.
Urban Trust's goal with the card is to offer financial services to individuals other financial institutions have denied credit.
"The Urban Trust Success prepaid debit card provides flexibility, security and a low-cost alternative for consumers who now rely on cash or those who face challenges with obtaining traditional bank or credit products," Robert L. Johnson, chairman of Urban Trust Holdings Inc., the bank's parent, wrote in an e-mail message to ATM&Debit News. "The Success card will allow consumers with an opportunity to conduct their financial transactions like many consumers through the mainstream."
Urban Trust's prepaid card also will open the door to African American consumers who are not the financial institution's customers by helping them develop a relationship with the bank.
Studies have shown African Americans lag behind when it comes to access to capital, including savings, stock and housing ownership, 401(k) participation and money for college, Johnson noted. That gap prevents a segment of African Americans from taking advantage of such economic opportunities as buying a home, saving money for college or saving for retirement.
"One way to provide this access is through a banking relationship and taking steps for financial literacy and education," he says.
Johnson is a billionaire entrepreneur who founded Urban Trust in 2006. He is best known, however, as founder of Black Entertainment Television. Johnson later sold BET to Viacom Inc., owner of CBS Television Network.
Visa says offering prepaid cards through member banks is important to its growth strategy. "Prepaid is a key priority for Visa and a vital part of the company's long-term strategy, and a key component of our strategy is focused on bringing the benefits of electronic payments to underserved consumers," Brian Triplett, Visa head of global prepaid products, said in a statement.
Some 80 million underserved consumers live in the U.S. who lack traditional banking relationships or access to payment cards, Triplett noted.
The market, however, is huge and potentially lucrative. Triplett says unbanked and underbanked consumers receive nearly $1 trillion in annual payments, and they spend more than $1 billion in annual check-cashing fees.
