Credit and Debit Card Ratings

Occupy Prepaid Debit Card No Slam Dunk

When the Occupy Wall Street movement announced its intention to unveil a prepaid debit card this past July, the news stirred plenty of attention. Unsurprisingly, the notion that a group of protesters who directed the bulk of their anger at bankers would enter the financial services industry was too delicious a story for many news outlets to pass up.

Adding to the allure of the creation of The Occupy Cooperative, which will release the Occupy Card and eventually hopes to offer other banking services to its product line, was the possibility that it could be the start of a shakeup of Wall Street that protests alone could not accomplish. “As we build up the number of users of the card, we shall soon be able to introduce further services that will shake up the current behemoths in the banking sector,” Carne Ross, a founding board member of the Occupy Cooperative, told BestPrepaidDebitCards.com in a recent interview. “These products will serve the same constituency as the card, wherever possible they will bolster the credit unions, provide low-cost choices, bypass the entrenched systems that rip everyone off, and brick-by-brick build alternatives for ordinary folk’s needs.”

Good intentions and plenty of publicity aside, the Occupy Cooperative faces a tough road ahead. That’s the message of a recent article in Time Magazine entitled “5 Hurdles an “Occupy”-Branded Banking Product Must Clear.” In the story, reporter Martha White identifies a number of challenges Ross and his colleagues will face as they begin their crusade to upend the financial services industry.

Among the hurdles the Occupy Cooperative must surmount are raising a sufficient amount of start-up capital. In her story, White cites the efforts of Occupy activists in San Francisco, who have tried and failed thus far to cobble together enough cash to launch what’s known as the “People’s Reserve Credit Union.” Also problematic, at least if Occupy intends to act like a regular bank and take deposits and offer loans, are the many, many regulations involved. While the Time article correctly points out that prepaid cards are largely unregulated (at least for now), entering into traditional banking services would require Occupy to buy a bank or credit union, since starting up a new one would mean obtaining a federal or state charter.

Other challenges Occupy faces also include the need to access the payment system – which costs money – so that cardholders can actually use their plastic and simply being viable financially if, as Ross promises, there are few fees associated with the card. Finally, White uses the example of PerkStreet Financial as a cautionary tale. When PerkStreet launched five years ago, she writes, it promised to upend the banking system by offering consumers such incentives as 2% cash back on debit card purchases. But PerkStreet’s ultra consumer-friendly approach didn’t make it; it will shut down in September. “We tried to change banking, the most broken industry in the country, in the midst of a financial crisis. It was incredibly hard and we were ultimately unsuccessful,” the article quotes PerkStreet CEO Dan O’Malley, from a blog post O’Malley wrote.

Only time will tell whether Occupy can figure out a way to succeed. Obviously, though, the group that hit the streets to protest inequality and the abuses of the financial system knows better than anybody how hard change can be.

Author: Chris Warren

  • Occupy Prepaid Debit Card No Slam Dunk

    Occupy Prepaid Debit Card No Slam Dunk

    When the Occupy Wall Street movement announced its intention to unveil a prepaid debit card this past July, the news stirred plenty of attention. Unsurprisingly, the notion that a group of protesters who directed the bulk of their anger at bankers would enter the financial services industry was too delicious a story for many news outlets to pass up.

    Adding to the allure of the creation of The Occupy Cooperative, which will release the Occupy Card and eventually hopes to offer other banking services to its product line, was the possibility that it could be the start of a shakeup of Wall Street that protests alone could not accomplish. “As we build up the number of users of the card, we shall soon be able to introduce further services that will shake up the current behemoths in the banking sector,” Carne Ross, a founding board member of the Occupy Cooperative, told BestPrepaidDebitCards.com in a recent interview. “These products will serve the same constituency as the card, wherever possible they will bolster the credit unions, provide low-cost choices, bypass the entrenched systems that rip everyone off, and brick-by-brick build alternatives for ordinary folk’s needs.”

    Good intentions and plenty of publicity aside, the Occupy Cooperative faces a tough road ahead. That’s the message of a recent article in Time Magazine entitled “5 Hurdles an “Occupy”-Branded Banking Product Must Clear.” In the story, reporter Martha White identifies a number of challenges Ross and his colleagues will face as they begin their crusade to upend the financial services industry.

    Among the hurdles the Occupy Cooperative must surmount are raising a sufficient amount of start-up capital. In her story, White cites the efforts of Occupy activists in San Francisco, who have tried and failed thus far to cobble together enough cash to launch what’s known as the “People’s Reserve Credit Union.” Also problematic, at least if Occupy intends to act like a regular bank and take deposits and offer loans, are the many, many regulations involved. While the Time article correctly points out that prepaid cards are largely unregulated (at least for now), entering into traditional banking services would require Occupy to buy a bank or credit union, since starting up a new one would mean obtaining a federal or state charter.

    Other challenges Occupy faces also include the need to access the payment system – which costs money – so that cardholders can actually use their plastic and simply being viable financially if, as Ross promises, there are few fees associated with the card. Finally, White uses the example of PerkStreet Financial as a cautionary tale. When PerkStreet launched five years ago, she writes, it promised to upend the banking system by offering consumers such incentives as 2% cash back on debit card purchases. But PerkStreet’s ultra consumer-friendly approach didn’t make it; it will shut down in September. “We tried to change banking, the most broken industry in the country, in the midst of a financial crisis. It was incredibly hard and we were ultimately unsuccessful,” the article quotes PerkStreet CEO Dan O’Malley, from a blog post O’Malley wrote.

    Only time will tell whether Occupy can figure out a way to succeed. Obviously, though, the group that hit the streets to protest inequality and the abuses of the financial system knows better than anybody how hard change can be.

  • Changes To American Express Serve Accounts

    Changes To American Express Serve Accounts

    In the increasingly competitive world of prepaid debit cards, companies are having to scramble to stand out from the crowd. The American Express Serve card has done that thus far by offering a variety of perks – including things like roadside assistance, purchase protection and early access to sporting event and concert tickets – that one would expect from a global financial services company like Amex.

    But the desire to entice more people to sign up for the Serve prepaid debit card is no doubt behind a number of changes American Express announced in mid-August of 2013. While not as glamorous as, say, the chance to snap up good seats to a Dallas Cowboys and Washington Redskins clash, the recent tweaks made to American Express Serve accounts are more substantive and beneficial to regular cardholders.

    Indeed, in the past American Express Serve cardholders were able to replenish their accounts using direct deposit from their employer or by, among other things, accessing funds from a separate debit or credit card account. As of August 13, however, Serve accounts began accepting direct deposit for a variety of payments from the federal government as well, everything from tax deposits to Social Security checks to Worker’s Compensation.

    Another upgrade made to the Serve card involves ATM transactions. Cardholders will now be able to withdraw cash without incurring a fee from more than 22,000 ATMs in the MoneyPass network worldwide. Outside of the MoneyPass network, Serve will charge $2 per withdrawal, which is in addition to any fee levied by the ATM operator.

    Perhaps the most important of the recent changes announced by American Express has to do with Federal Deposit Insurance Corporation (FDIC) insurance. As of August 13, any time a Serve cardholder adds money to their account, American Express quickly places those funds into a so-called custodial account (with either Wells Fargo or American Express Centurion Bank) that has FDIC insurance. The upshot of this is that Serve account holders receive what’s known as FDIC pass-through insurance, meaning that their money (up to $250,000) is protected should a bank fail.

    As competition among prepaid debit card issuers heats up, expect more and more changes and improvements to the standard features companies offer.

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