In an effort to grow revenue through the expansion of fee-based consumer products, JPMorgan Chase (NYSE:JPM) announced yesterday its intentions to sell prepaid debit cards.
The bank’s new Visa (NYSE:V) debit card, dubbed the “Chase Liquid,” will operate like a checking and savings account hybrid. It carries a $4.95 monthly fee and allows customers to deposit money onto the card and make withdrawals from Chase branches and ATMs.
“What we did is design a product for customers who want a low-cost alternative to traditional checking accounts and banking accounts, and for people really looking for the control and flexibility of the design that we put in place,” Ryan McInerney, Chase’s chief executive of consumer banking told The Wall Street Journal.
McInerney also stated his hopes that the card will attract new customers. The exec is likely referring to the thousands of Americans who the FDIC considers either “unbanked” or “underbanked,” in addition to snatching a few clients from competitors.
Chase is jumping into the prepaid debit card arena at a time when some banks are heading toward the exit. Wells Fargo & Company (NYSE:WFC) has began to pull back on its prepaid offers. However, Chase isn’t the only big bank giving the new cards a go. U.S. Bancorp (NYSE:USB) and BB&T (NYSE:BBT) already have launched similar programs.
Many financial institutions embarking on the growing prepaid debit card trend are looking for ways to pad earnings after taking big regulatory hits. According to the Mercator Advisory Group, the prepaid card business is big business. The organization expects that consumers will load a $160 billion on prepaid cards by 2012, CNBC reports.