Chase announced that it is closing its General Purpose Reloadable (GPR) prepaid card product, Liquid to new customers as it introduces a new entry level checking account. Digital Transactions had this to say about the introduction of the Chase Secure Banking account:
Chase Secure Banking has the same $4.95 monthly fee as Chase Liquid. The new account includes a Visa debit card for payments and access to 17,500 Chase-branded ATMs, access to Chase’s mobile app and online banking, direct deposit, and other banking services. It does not provide paper checks. Current Chase Liquid cardholders can keep their Liquid account after opening a Chase Secure Banking account, but Liquid no longer will be offered to new customers, Chase said.
“A bank account can open doors to economic opportunity and improve the financial lives of so many across the country,” Thasunda Duckett, chief executive of Chase Consumer Banking, said in the release. “As a bank, we want to help more consumers get access to an account that can better help them manage their everyday needs while building their financial health.”
If you look at the features and functionality of the old prepaid and new checking account products they are quite similar; a low-fee deposit function with access through a mobile app, a debit card, access to ATMs, but no overdraft function. (I guess if you come up a little short before payroll hits your account, you can always go to a payday lender.) The only real difference is what is happening behind the scenes and irrelevant to the consumer. Prepaid deposits are pooled and associated with a single account where bank accounts are managed individually.
The difference between prepaid and checking has been closing in as both banks and prepaid card program managers add similar features and as regulation has made them nearly indistinguishable. Is it a coincidence that Chase is closing its Liquid product to new customers 12 days before the latest raft of new prepaid rules roll out on April 1?
Subscribers to Mercator’s debit and prepaid practices can take a look at a report where we look at the blurred lines between checking accounts and GPR prepaid cards here.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group
