Prepaid transaction accounts could give banks a way to serve unbanked and underbanked consumers while adapting to the revenue pressures created by the Durbin Amendment. BB&T has introduced the BB&T MoneyAccount, a prepaid account featuring a Visa-branded debit card that is expected to qualify for the prepaid card exemption from lower regulated debit interchange fees.
The product combines a straightforward monthly fee with services traditionally associated with checking accounts, including direct deposit, online bill payment, mobile banking, ATM access, and FDIC insurance. Because customers can spend only the funds deposited into the account, the product also eliminates the possibility of overdraft fees.
Nearly 60 million Americans do not have a bank account today or they are underbanked,” noted Scott Qualls SVP Deposit Access Products Manager at BB&T. “The BB&T MoneyAccount is a prepaid solution that provides our clients with a secure and easy way to access their funds. It also features a simple, transparent fee structure.”
The BB&T MoneyAccount has a flat monthly fee of $10 that can be reduced to $5 with monthly deposits totaling $1,000 or more. The account holder can only spend funds that have been deposited, which helps them to manage their finances and eliminates the risk of overdraft fees. The BB&T MoneyAccount has many unlimited features including:
• Free PIN and Signature purchases anywhere Visa debit is accepted worldwide
• Free BB&T ATM cash withdrawals and inquiries
• Free direct deposit
• Free transfers to/from other BB&T accounts
• Free online banking & bill payments
• Free mobile banking and alerts
• FDIC insurance
• BB&T Complete Client Protection for unauthorized purchases if the card is lost or stolen
• The first monthly fee will be waived
Prepaid Accounts Could Become Part of Banks’ Post-Durbin Strategy
We expect many banks will offer this type of account if the current draft regulations of the Durbin Amendment with a prepaid card exemption are finalized in April. Increased interchange fee income combined with some service and delivery channel restrictions could be one of the winning formulas for the post-Durbin world.
The BB&T MoneyAccount demonstrates how banks could respond to debit interchange regulation by developing alternative products that generate interchange revenue while addressing the needs of consumers who may not use traditional checking accounts. The prepaid structure also gives customers access to many familiar banking services without requiring them to maintain a conventional deposit account.
If the prepaid card exemption remains part of the final Durbin Amendment regulations, prepaid transaction accounts could become an increasingly attractive option for financial institutions. Banks will still need to balance pricing, services, and customer needs, but products such as the BB&T MoneyAccount could provide one potential model for serving unbanked and underbanked consumers in the post-Durbin environment.
If you want to learn more about this, please read the press release: http://www.prnewswire.com/news-releases/bbt-introduces-new-prepaid-moneyaccount-116298549.html
