NetSpend Holdings Inc. (NASDAQ: NTSP) says it will be the “exclusive program and distribution manager and processor” for PayPal’s new PrePaid MasterCard product.
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NetSpend is a growing provider of general-purpose reloadable (GPR) prepaid debit cards. Its revenues more than doubled between 2007 and 2010, from $128.6 million in 2007 to roughly $275 million. It markets its GPR cards through partnerships with 750 retail distributors, representing 39,000 physical locations.
PayPal PrePaid MasterCard debit cards can be funded via direct deposit, or at one of the 100,000 NetSpend Reload locations throughout the United States, with load fees varying from free to $3.95. Cards must be linked to an existing PayPal account, the company explained through an official release.
The timing of NetSpend’s official announcement is curious — particularly because this partnership was already disclosed, to some extent, in November. According to American Banker, NetSpend mentioned a new five-year partnership with PayPal in a one-paragraph 8-K, filed with the SEC on Oct. 28.
“I’ve talked to a couple of investors who are really excited and others who are just not sure what this means,” D.A. Davidson & Co. analyst John Kraft told American Banker at the time of the initial announcement.
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Today’s release also identifies the issuer for the new PayPal PrePaid MasterCard product: The Bancorp Bank, a subsidiary of publicly-traded Bancorp Inc.
