September 18, 2013
Bluebird prepaid card and The Chase Liquid prepaid cards are targeting teenagers and youngsters by offering a non-expensive, convenient system for withdrawals and cash transactions. The prepaid card industry pundits have long believed that companies require a proper segmentation, targeting and positioning of prepaid cash cards. Teenagers make a good target audience, as parents usually don’t want to place the fiscal responsibility of a credit card on their children, but would still like a way to track how their cash is being spent.
Bluebird, a prepaid card initiative by American Express and Walmart was launched in late October 2011, in addition to American express’s digital wallet platform ‘Serve'. 3 months later in Jan 2013, there were 575,000 customers of Bluebird according to Dan Schulman, Group president of enterprise growth, Amex. 85% of Bluebird customers are new to Amex and 45% of them are estimated to be under the age of 35.
The American express Bluebird is a low cost alternative to the general-purpose prepaid card. The bluebird does not charge a monthly fee for activation and can be obtained for $5 at the Walmart stores or for free online. If the cardholder is enrolled in direct deposit, it offers free ATM withdrawals within the MoneyPass network whereas other withdrawals are charged at $2.
The Bluebird can be loaded for free from a bank account or by using cash or a debit card at participating Walmart locations, although loading with a debit card costs $2. Customers can deposit checks by snapping a picture with their smartphones, electronically pay bills, send cash to family and friends, and place up to $100,000 into their accounts. Users can withdraw a maximum of $500 per day with a limit of $2000 per month. If a customer wants to send money to someone that does not possess Bluebird, all he has to do is click Pay Bills and then add that person as a payee. The receiver’s address and name is required but no social security number or EIN, which makes the process simple. The user accumulates 5 chase reward points for every dollar spent which can be redeemed for various goods and services, adding a rewarding incentive to using the card (Always a good combination).
Chase Liquid is a reloadable card that can be used at any terminal that accepts VISA® debit cards. It does not charge any fees to open an account, load cash, withdraw or reload money onto the card. The Chase Liquid card charges a flat rate of $4.95 a month, with no charge for getting paper statements or paying bills. A comparison of annual cost of various cards to the typical user as tabulated by Breton Woods is shown below:
The prime offering of Chase Liquid is free check and cash deposits and free ATM withdrawals. 17,500 ATMs are in operation along with 5,500 branches in 32 states. Chase Liquid does not charge for customer service. The card can be loaded with as little as $25 to begin with.
On the contrary, American express Bluebird card charges $2 for each ATM withdrawal if the customer does not enroll in direct. There are 80,000 ATMs available for withdrawal for the American express Bluebird, a plus which may or may not make up for that $2 fee. If that wasn’t enough to level the playing field, Bluebird also doesn’t charge a monthly fee for its card, unlike the Chase Liquid who charges $4.95 a month.
LTP View: Both prepaid cards have new cost effective options for customers who are economically backward and unbanked/underbanked. While the cost of obtaining and maintenance of a Chase Liquid card might be a little lesser, the sheer number of its ATMs, Walmart outlets (more than 4000) and service offered by the American Express Bluebird card might give it an edge.