Credit Cards

Tips, news, reviews, caveats, trends, updates and analysis related to consumer and business credit cards, and prepaid debit cards. From the interest rate specialists @ FedPrimeRate.com

Thursday, November 10, 2005

If The People @ Mint Have Their Way, Prepaid Credit Cards Will Soon Be As Popular in Canada As They Are In The United States

Prepaid credit and debit cards are selling very well in the United States; Mint hopes to make them just as popular in Canada. Here's a snippet from a press release issued today:

"Mint Inc., a subsidiary of Mint Technology Corp. (TSX-V: MIT), is pleased to provide the following update on the Company's progress on the introduction of prepaid credit cards in the marketplace. A widely accepted and popular method of payment in the United States, Mint is the first company to deploy and support prepaid, reloadable credit card programs in Canada.

Mint announced today that two of the Company's prepaid, co-branded credit cards have launched to date and are being sold through retail outlets in and around Toronto. Initial sales of the cards show a positive trend in consumer acceptance. Furthermore, another five prepaid, co-branded credit cards are due to be launched over the next quarter, and will be distributed through nationwide retail networks. The number of cards pre-sold equals 275,000 thus far, providing upfront revenue to the Company. In addition to the co-branded programs being introduced, Mint has been approached by several corporations to supply another Canadian first -- a prepaid payroll credit card. Participating companies will supply their employees with a prepaid credit card to automatically transfer paycheques and corporate expenses to their cards. The convenience of a prepaid payroll credit card will lead to direct administrative cost savings.

Mint's prepaid credit card programs generate revenue from four different sources; consumer card purchases, cardholder transactions, monthly user fees, and interest on the prepaid float.

A large segment of Canadians who have been excluded from obtaining traditional credit cards now have access to the convenience, services and safety that a credit card provides. Virtually anyone can purchase a prepaid credit card because prepaid credit cards do not require a credit check and age requirements are lower. A prepaid credit card can be useful in countless situations including parents funding university expenses or wanting to teach financial responsibility to their children; giving consumers a safe way to make online purchases; or supplying a platform for business owners to provide and track employee expenses. Prepaid credit cards can be used at the millions of worldwide locations where traditional credit cards are accepted today including retailers, websites, mail order, mobile purchases and select ATM cash withdrawals.

While the market is virtually untapped in Canada, prepaid credit cards are the fastest growing segment of the payment industry in the United States. The Pelorus Group projects that the number of prepaid debit cards [US equivalent to Canadian prepaid credit cards] will grow from 15 million in 2003 to just over 50 million in 2008. A study by Mercator Advisory Group indicated that in 2004, US$159 billion was loaded onto prepaid cards, representing a 24% increase over 2003 in the United States."


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