NetSpend Announces Definitive Agreement With The Bancorp Bank

by Mercator Advisory Group 0

NetSpend has been looking for new BIN-sponsoring banks since Meta Bank had its brush with the OTS – but has now announced a new partner:

“NetSpend Holdings, Inc. (Nasdaq:NTSP) and The Bancorp Bank Payment Solutions Group, a division of The Bancorp Bank (“Bancorp”), a wholly owned subsidiary of The Bancorp, Inc. (Nasdaq:TBBK), announced the signing of a multi-year agreement pursuant to which The Bancorp will serve as a new issuing bank for both new and existing card programs for which NetSpend serves as program manager and processor.”

This relationship with The Bancorp Bank is not exclusive, as NetSpend has announced a strategy to move 15% of its Prepaid Financial Services cardholders to new banks as a part of its diversification plan:

“NetSpend continues its discussions with other current and prospective issuing banks and remains committed to its previously articulated strategy of diversification among at least three issuing banks.”

This diversification strategy should be complete by the second half of 2011, which means plenty of competition for BIN-sponsoring banks:

“Based on the timing of its agreement and expected program launch with The Bancorp and its discussions with other prospective issuing banks, NetSpend currently expects to transition more than 15% of its non-corporate employer-issued debit card volumes, either from existing or new cardholder accounts, to one or more banks by the second half of 2011.”

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