Flying The Prepaid Skies

Ben Franklin might have tweaked an aphorism to read: A dollar spent is some mileage earned.

Prepaid card provider Netspend and United Airlines said May 24 that they would launch the Mileage Plus GO Visa Prepaid Card, which is being billed as the first prepaid card program being offered in the United States that allows consumers to directly earn miles.

In an interview with PYMNTS’ Karen Webster, Tammy Ting, vice president of strategic accounts with Netspend, the executive said that “we’d been contemplating moving into the affinity space,” and asserted that the new pact and the foray into affinity represents a natural extension for the company, building on a partnership already in place with Visa.

Speaking generally of affinity and rewards programs, Ting stated that “at the end of the day, consumers want to be rewarded when they spend their own hard-earned money,” and make that same money go further.

Netspend saw the United linkup as a way to do that with a brand with which consumers have already forged relationships, giving them a new opportunity to earn miles with the carrier. Many United frequent flyer customers may not have had much experience with prepaid, she said, where value in that product can lie within convenience, control and other benefits.

From the United perspective, Webster and Ting discussed, the card opportunity is one that seeks to shift consumers onto that platform, building mileage as they transact. The intention and objective remain two-fold, said Ting, as “we are going to be offering this to the Mileage Plus base, and this is a really great way for folks — who may just prefer debit or who are credit averse — to use debit and prepaid and still earn miles.”

The new card — where signature transactions qualify in person or online — also presents an opportunity to gain new customers. A Mileage Plus account must be in place to be validated, and “if you don’t have one, you can enroll when you order the card,” she said, with promotional efforts across digital and physical channels, including social media.

Netspend’s affinity foray, choosing airlines and, specifically, United first comes as travel as a category remains “a natural space for rewards,” as Ting called it, because consumers are already familiar with the concept of travel rewards earned with credit cards.

Simply stated, the program is one that offers the rewards that have typically accrued to credit cards — but is mindful that not everybody wants to use credit to earn those rewards or has access to credit. Shop, earn miles, redeem said miles for travel. Which can tie in to earning mileage for a family, she illustrated, a multiplier effect of sorts.

Looking at next steps, focus will be on scaling the program, said Ting, both across existing customers and new ones, with the eventuality that other opportunities might exist within the travel category.