American Express and Walmart announced the launch of Bluebird yesterday, a new low-fee prepaid card loaded with mobile capabilities, calling it “an alternative to debit and checking accounts designed to help consumers better manage and control their everyday finances.”
Prepaid cards look like credit cards, but they’re more like gift cards in that they are loaded with money on the front end, so cardholders are only spending the money on the card, not accruing debt. They are a great alternative to cash, and have grown more and more popular in the past few years.
This new prepaid card is good news for customers in the market for prepaid products – which could be anyone from underbanked consumers to students, or anyone who wants to avoid high checking account fees and requirements about minimum balances. Prepaid cards are popular with parents who are reluctant to give their kids access to regular credit cards, and also among folks who may not qualify for traditional bank accounts or unsecured lines of credit.
An Answer to High Fees
Many prepaid cards come with high fees for everything from activating the card to reloading it with more money or getting a statement, but Bluebird has a low-fee structure that will appeal to a wide range of prepaid card consumers.
Dan Schulman, president of the enterprise growth group at American Express, said in the press release that “Bluebird is our solution to help consumers who currently may be poorly served by traditional banking products. It allows them to easily and safely move, manage, and spend their money. In an era where it is increasingly “expensive to be poor,” we have worked with Walmart to create a financial services product that rights many of the wrongs that plague the market today.”
One of those wrongs is the increasingly high cost of basic checking accounts, which according to a February 2012 by Bretton Woods, Inc., now cost an average of $259 a year and rising. In addition to higher minimum balance requirements (often starting at $1500 or $2000 minimum monthly average), fees for things like ATM withdrawals and statement printouts are at an all-time high. Checking account holders may feel that they can’t get through one month without being slapped with a new fee.
No Fees, Plus Plenty of Mobile Features
Bluebird has no monthly fee, no annual fee, no setup, activation, or direct deposit fee, and no fee for replacement cards or customer service inquiries, available at no charge 24 hours a day, seven days a week. Customers who withdraw money from MoneyPass Network ATMs with direct deposit will pay no fee, while out-of-network ATM withdrawals will cost $2.
Bluebird users will also find that it functions as a digital wallet, allowing person-to-person payments, a mobile app, and the ability to control an account from your smartphone. That means parents who give a card to their child can control the card from their phone, keeping an eye on withdrawals and depositing more money remotely when the account runs low. Bluebird runs on the American Express Serve mobile platform, which gives it the potential to offer promotions on social networks like Foursquare and Twitter, as many AmEx cards already do.
American Express and Walmart have promised additional features for Bluebird, coming out in the first quarter of 2013. Customers can sign up free at bluebird.com, or for $5 at any Walmart store.