Cards

Bank of America expects 3% GDP growth this year and a 2% improvement next year, even in the face of rising rates. Consumers’ continued willingness to spend and borrow, which was evident in the bank’s first-quarter results, is a key reason for that outlook.

Bank-issued prepaid benefits cards were supposed to help state governments deliver these funds more efficiently. But the pandemic scrambled the economics of these programs.

A handful of snafus, some a decade old, shouldn’t tar an entire line of payment products that are a lifeline for many consumers and have helped millions of Americans access and manage their finances during the COVID-19 pandemic.

Bank of America’s consumer clients made $294 billion of total payments last month, up 16% from a year earlier, as the U.S. economy continued its recovery from the coronavirus pandemic.

Bank of America is under investigation in connection with its role as the administrator of a state program that was rife with fraud. The fiasco is one of several involving the prepaid card industry over the last 12 years.

The pandemic-era shift to digital payments gave prepaid cards a jolt worldwide. In Canada, the government's likely adoption of the cards for disbursing benefits and other payments could drive further growth as it did in the U.S.

Startups in the U.S. and Canada are emphasizing features such as virtual issuance and receipt capture in creating expense cards for business owners.

Merchants and banks have taken predictably opposing positions on a Federal Reserve proposal to increase competition among networks that route online debit transactions. But amid the hundreds of comments, it's those from supposedly neutral parties — the Department of Justice and the Federal Trade Commission — that stand out.

Mos, a student financial-aid startup backed by investors including Sequoia Capital and the rap star Jay-Z, is venturing into banking.

The central bank wants financial institutions to enable additional routing options for online purchases, a change industry advocates say would strain the resources of smaller card issuers.