> Posted by Jeffrey Riecke, Communications Assistant, CFI
A few months ago we shared a post spotlighting Walmart’s popular Bluebird prepaid debit card service, Your Neighborhood Bank, Walmart? As of the past few days, there’s a surprising new entry into this expanding prepaid card space: Occupy. With the mission of providing quality, transparent financial services to everyone, especially to those who are currently denied service by larger for-profit banks, the Occupy Wall Street Movement launched the Occupy Money Cooperative, indicating its first product will be a prepaid debit card.
The Occupy Money Cooperative aims to provide services that differ from those of the U.S. for-profit banking industry, overcoming such annoyances as account-opening requirements, service fees, and lack of branch penetration. Much like a credit union, the Cooperative will be controlled and owned by its members. Unlike a credit union, the Cooperative won’t be a deposit-taking institution or be bound by common bond membership restrictions – anyone will be able to join. Here’s a few of the Cooperative’s pledges, taken from its website.
- Will offer access to low cost, transparent, high-quality financial services to everyone
- Will actively and directly encourage the development of innovative financial services that will foster financial inclusion, and lead the field in terms of openness and fairness
- Will lead by example to affect a positive change for our members and stakeholders, and provide an uplifted standard of conduct for the financial community
- Will actively work with business partners and organizations that demonstrate a commitment to the well-being of their communities
The Cooperative is now signing up members and will soon be open to receiving start-up donations – from members and non-members. Once ample funding is secured, the prepaid debit card, to be called The Occupy Card, will be available. The card will have a monthly fee of $0.99. Additional details surrounding the card’s service charges remain to be disclosed. Prepaid debit cards often associate fees with ATM withdrawals, balance inquiries, and card re-loadings, among other services. The Cooperative hopes to offer checking and savings services to its members in time, but stated that due to the growing popularity of prepaid debit cards among the unbanked, this will be the first service offered.
Prepaid cards are indeed on the rise in the United States. Among the unbanked in the U.S, use of prepaid cards increased from 12.2 percent of unbanked households in 2009 to 17.8 percent in 2011. Among the total U.S. population, a 2012 financial literacy survey found that 15 percent of adults had used a prepaid card within the last year. About three-fourths of this group cited convenience as their primary reason for doing so. About three-fourths indicated they enjoyed the cards’ preventing their overspending and the increased safety over carrying cash. Lack of other payment or banking options was cited as a reason for prepaid card use among roughly one-fourth of respondents.
Image credit: Occupy Money Cooperative
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