Business
BET partners with NetSpend to market prepaid payment card
BET Networks is entering the exploding business of prepaid cards, partnering with an industry leader in hopes of reaching millions of African Americans who don’t use banks.
BET, the biggest brand name in black media, is offering the card with NetSpend, one of the biggest prepaid card companies. NetSpend hopes the endorsement will help it convert BET viewers into fee-paying customers.
African Americans are over-represented among what the financial industry calls the unbanked and underbanked, people who don’t have bank accounts or who use high-cost services like check-cashing and payday loans.
Prepaid cards are like debit cards but aren’t attached to a checking account and sometimes lack the consumer protections offered by debit and credit cards. They are the fastest-growing electronic payment method, according to a 2010 study by the Federal Reserve.
BET began taking phone and online orders this month for the card, called the Control Prepaid MasterCard. The companies are testing the market before what they expect will be a flood of interest, says Dan Henry, CEO of NetSpend.
“We look for true partners, like BET, who recognize this need in this country: to provide financial services for low-income consumers,” he says. Those consumers often resort to costly options like storefront check-cashers. For some, prepaid cards are a lower-cost alternative.
To the financial industry, the unbanked are a mostly untapped market. American Express and other companies are marketing prepaid cards and other products designed for people who can’t get bank accounts or don’t trust banks.
Other potential customers live paycheck to paycheck and prefer the safety of a card that will not charge unexpected fees for overspending or bounced checks.
