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Bieber Joins Ex-Addicts Fighting Chase in Prepaid Market - Bloomberg

The allure of the fast-growing U.S. market for prepaid debit cards is pitting niche players like pop star Justin Bieber against financial giants including JPMorgan Chase & Co. (JPM) and American Express Co. (AXP)

Both Bieber and JPMorgan want to sell more of the cards, a part of the financial services business that holds as much as $1.7 billion in potential fees for banks seeking new revenue streams as they face growing competition and regulation.

Myriad players, including a firm catering to recovering drug addicts and alcoholics, are stepping up with their own products on the theory that some consumers may pay a slight premium for a card with novel functions -- or Bieber's visage printed on it.

"The market for prepaid debit cards and payroll card products continues to grow at lightning speed, with new products racing to compete with mainstream consumer services like checking accounts," Madeline Aufseeser, senior analyst with the Boston-based Aite Group, said in an e-mail.



The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
by dvx (dvx.clt št gmail dotcom) on Wed Jan 2nd, 2013 at 02:12:29 PM EST
[ Parent ]
Oh boy! Another credit bubble! Nobody ever went broke betting on consumer greed!

Align culture with our nature. Ot else!
by ormondotvos (ormond.otvosnospamgmialcon) on Wed Jan 2nd, 2013 at 07:47:22 PM EST
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There must be something I don't understand about the word "prepaid".
by afew (afew(a in a circle)eurotrib_dot_com) on Thu Jan 3rd, 2013 at 02:49:44 AM EST
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Banks, etc., love debit cards; it's free money for them to play around with.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
by ATinNM on Thu Jan 3rd, 2013 at 12:24:40 PM EST
[ Parent ]
Banks, etc, above all love credit cards, because it's usurious considerable interest rolling in.
by afew (afew(a in a circle)eurotrib_dot_com) on Thu Jan 3rd, 2013 at 03:37:23 PM EST
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prepaid debit cards

Is that what used to be called "secured credit cards"?

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

by Carrie (migeru at eurotrib dot com) on Thu Jan 3rd, 2013 at 03:07:49 PM EST
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You give them money. Then they let you spend it.

They don't incur a credit card surcharge. Apparently they're also useful for online payments where people don't want to risk using a normal debit card, either to keep transactions hidden or because they're worried the card may be jacked and stolen.

Also, not everyone has a bank account. (Or can get one.)

by ThatBritGuy (thatbritguy (at) googlemail.com) on Thu Jan 3rd, 2013 at 03:14:09 PM EST
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not everyone has a bank account. (Or can get one.)

That happens to be a big problem for a lot of people...

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS

by Carrie (migeru at eurotrib dot com) on Thu Jan 3rd, 2013 at 03:18:22 PM EST
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Also, I imagine, for when you want your teenager to be able to shop online but you sure as hell don't want to give them access to a credit card.
by Colman (colman at eurotrib.com) on Thu Jan 3rd, 2013 at 03:25:29 PM EST
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Can be useful when travelling, too, allowing payments of various kinds like travellers' cheques used to, plus cash withdrawals from ATMs, while limiting the potential damage in case of theft of the card.
by afew (afew(a in a circle)eurotrib_dot_com) on Thu Jan 3rd, 2013 at 03:42:08 PM EST
[ Parent ]

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