NetSpend has increased its number of cardholders and the proportion of those cardholders who load their cards with direct deposit when compared with the numbers from the first quarter of last year. The company predicts future growth because of its partnerships with PayPal, 7-Eleven, and Family Dollar.
NetSpend leads the industry in the percentage of active cards, with direct deposit growing 44%, vs. 37% last year, says Kraft. Users with direct deposits are incrementally more lucrative customers for the bank, he notes, which drove gross dollar volume up over 35.7% from last year, notes the analyst.
While the company welcomes competition, it will need to continue to evolve to be competitive against bank players in the space as well as its traditional competitors like Green Dot. NetSpend will need to increase distribution and its product offerings in order to stay competitive.
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