NEW YORK (MainStreet) — American Express (Stock Quote: AXP) is venturing further into the prepaid card market with a new prepaid debit card that doubles as a campus ID for students attending the University of North Florida.
Starting last week, UNF students could trade in their old student IDs for the Osprey 1 Card, which can be used on campus for meals and off campus at any retailer that accepts American Express.
The move is not exactly unexpected, since prepaid debit cards have become increasingly popular in the past year, thanks in part to the Durbin Amendment that excluded prepaid cards from swipe fee limits and the Credit Card Accountability, Responsibility and Disclosure (CARD) Act, which made it more difficult for anyone under 21 to get a credit card.
But Stephan Happ, senior vice president of global payment options at American Express, says that prepaid debit cards were positioned to do well in the student market regardless of the regulations.
“[Prepaid cards have] financial responsibility as a built-in feature,” Happ says. “You can only spend what you put in. This makes them a safe alternative to checks or cash.”
To play up the financial responsibility angle, Amex added account controls to the Campus ID card that let cardholders view their real-time transaction history to monitor spending, receive email or text alerts about low funds, disable or enable ATM access and schedule automatic reloading of funds.
Happ says Amex will be “aggressively pursuing” widening its presence in the student prepaid space and has already received “significant interest from other campuses” looking to offer their own version of the Osprey 1 card.
UNF’s card is similar to the low-fee prepaid card American Express launched in June in that it carries no fees for monthly maintenance, activation, balance inquiries or foreign currency conversion. Students can load a maximum of $1,000 a month and $6,000 annually. The card can be loaded via a linked bank account or through Green Dot Money Pak, though that one charges a $4.95 fee to add funds. The first monthly ATM cash withdrawal is free, after which a $2 fee applies each time.
However, Happ says that Amex plans on offering more alternatives to put money on the card in the future, including direct deposit or financial aid disbursement, as it expects the space to get more competitive.
What are some of the better prepaid cards currently on the market? Find out in MainStreet’s roundup of the best prepaid debit cards!