The Ups and Downs of Prepaid Cards

What’s with all the fuss? There’s growing debate about prepaid debit cards, and with like anything else new, there’s probably at least some good reason for it. Traditional prepaid card providers charge customers fees in a way that isn’t uniform or easy to price compare.  So for the average consumer, it is very difficult to answer the most important question when making any financial choice, “Is this right for me?” Newcomers like the KAIKU® Visa® Prepaid Card are trying to make it easier on consumers to answer that question.

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New Faces Emerging In an Evolving Industry

If we look to the past of prepaid cards, we see titans like Green Dot, NetSpend, Walmart, and Western Union leading the charge with revenue coming from cardholder fees. They all established revenue models for their cards, based on fees (high fees), with NetSpend reporting 75% of its revenue as having come from cardholder fees. Yet, with an increasing number of people who need help managing their money without the cost of high fees, new players like Kaiku Finance are offering the KAIKU® Visa® Prepaid Card with fewer fees and more features. As described accurately by the COO of Kaiku Finance, Joel Sherwin, “Our [business model] is profitable and still allows us to serve our clients’ best interests by saving them money. It is a win-win situation.”

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