Reloadable prepaid cards continue to play an important role in expanding access to financial services, particularly for consumers seeking alternatives to traditional checking accounts. As competition in the prepaid market has intensified, providers have increasingly relied on major retail partnerships to expand distribution, improve visibility, and attract new cardholders.
American Express took that approach by testing its Bluebird prepaid card in Walmart stores, giving the product access to one of the nation’s largest retail footprints. While the partnership created an opportunity to grow market share, it also introduced direct competition with Walmart’s existing MoneyCard, making product differentiation and value proposition critical to success.
In a move that will likely give its fledgling prepaid business a lift, American Express has begun testing the sale of some prepaid cards in Wal-Mart stores. An agreement with the retailer would give the business a large distribution channel, though it does put the card in competition with Wal-Mart’s own MoneyCard.
The New York-based lender is marketing the reloadable cards, which can be used wherever American Express is accepted, under the name “bluebird” in about 180 of the discount retailer’s stores on the West Coast, Laura Kelly, an executive helping spearhead the company’s push into prepaid cards, said in an interview Monday.
While the American Express card has some limitations, including not being able to accept direct deposits from government sources, to shoppers those differences may not mean as much a the fees on the two different cards. The value of having the card in Wal-Mart stores may be muted by competition between the two, if the companies do not distinguish them sufficiently in their marketing messages.
Retail partnerships remain a powerful strategy for expanding prepaid card adoption, but shelf space alone does not guarantee success. Consumers ultimately compare fees, features, and convenience when choosing between competing products. For American Express, placing the Bluebird prepaid card in Walmart stores represented an important step toward broadening its prepaid presence while highlighting the growing importance of retail distribution in the evolving prepaid payments market.
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