Arm Twisting Tactics Over Prepaid Reload Results in Restraint of Trade Law Suit

by Mercator Advisory Group 0

This short article in BusinessWeek telegraphs the future introduction of a Vanilla reload network from InComm, identifies the cost of a reload transaction conducted on that network, and indicates the tactics InComm has taken to drive adoption of the reload network by as many program managers as possible. Apparently NfinanSe has decided that those tactics border on restraint of trade and have filed a law suit to that point.

“Interactive allegedly conveyed to nFinanSe its intention not to fulfill its contractual obligations as distributor unless nFinanSe agreed to join Interactive’s “Vanilla Reload Network,” which would set a uniform $3.95 fee for consumers seeking to add money to their prepaid debit cards.

Interactive’s actions constitute an illegal restraint of trade and violate U.S. antitrust laws, nFinanSe claimed in the complaint.”

Speculation is that this legal activity has less to do with NfinanSe adopting a new reload network and more to do with InComm gaining the ability to reload its products at the retail locations that are currently the exclusive domain of NfinanSe. Time will tell.

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