NetSpend Vows to Diversify Beyond Troubled MetaBank

by Mercator Advisory Group 0

The news around NetSpend and MetaBank all points to greater opportunities for banks that want to try their hand at the prepaid business. NetSpend said in an earlier filing with the Securities and Exchange Commission that it would seek new partnerships with banks. Now, in an earnings call, the company said that it is in talks with banks both large and small. NetSpend is not the only program manager out there that is thinking about this. For a more detailed analysis of the situation, see Mercator’s research viewpoint: The OTS Order Against MetaBank Touches NetSpend and the Prepaid Industry, available at

With regulatory problems overshadowing its main issuing partner, prepaid card program manager NetSpend Holdings Inc. says it is optimistic that it will be able to form partnerships with other issuing banks.

NetSpend is looking at proposals from a number of regional and national banks to provide sponsorship services, chief executive Dan Henry told analysts Wednesday during NetSpend’s third-quarter earnings call. “We expect to have a pretty good group of banks,” he says, adding that the board of directors will be reviewing a bank-diversification plan at its next regular meeting.

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