Chase Expands Availability of Prepaid Card Across All Branches
07/09/2012| 05:26pm US/Eastern
By Andrew R. Johnson
J.P. Morgan Chase & Co. (>> JPMorgan Chase & Co.) is beginning to sell a prepaid card in all 5,500 of its branches nationwide as the bank continues its bid to replace lost revenue.
The Chase Liquid card is an alternative to a traditional debit card in that it does not come with a checking account. The card can be used anywhere Visa Inc. (V) cards are accepted, and it carries a monthly fee of $4.95.
The largest U.S. bank by assets began testing the sale of the card in about 200 branches in May. Prepaid cards have traditionally been marketed to so-called underbanked consumers by alternative financial-services companies like Green Dot Corp. (>> Green Dot Corporation) and Western Union Co. (>> The Western Union Company), who sell their cards online and in retailers like Wal-Mart Stores Inc. (>> Wal-Mart Stores, Inc.) and 7-Eleven Inc.
Mainstream lenders have shown more interest in offering the products, though, as new regulations curb the amount of revenue generated by traditional credit and debit cards. Some large-bank executives, including Chase Chief Executive Jamie Dimon, have argued the regulations would push consumers with smaller account balances out of banks because lenders would be forced to increase fees and other costs to service them.
Other mainstream lenders offering prepaid cards include American Express Co. (>> American Express Company), U.S. Bancorp (>> U.S. Bancorp) and Regions Financial Corp. (>> Regions Financial Corporation). Some consumer advocates have worried banks would try to push lower-income customers into prepaid cards, which can come with numerous fees and fewer consumer protections in cases of fraud.
But some consumer advocates also said they liked Chase's prepaid card because of its integration into the bank's branch network.
Chase executives have stressed its card comes with the same benefits offered to its other customers, noting that the Liquid card can be used to withdraw cash for free at any of Chase's 17,500 ATMs and its branch locations. Customers also can deposit funds onto the card for free at a Chase teller or certain Chase ATMs specially equipped to handle cash and check deposits.
The card "is a low-cost alternative to traditional checking accounts and its convenience and pricing transparency sets a new standard for prepaid cards," Ryan McInerney, chief executive of consumer banking for Chase, said in a written statement.
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