In America the Walmart Bluebird card launched in October 2012 and by January, it had over 575,000 account holders and $275 million in funds loaded onto the cards. Eighty-five percent of Bluebird customers are new to card partner Amex, and 45% under 35, according to a February company presentation. This is unprecedented growth for such an untapped market.
Amex has been continuously updating the Bluebird card since its launch. In March, it added FDIC insurance and chequebooks transforming Bluebird from a prepaid product to a true checking account. Users can now place up to $100,000 into accounts each year.
The new paper checks have an unusual, added security feature. To write a check, a user must first obtain an eight-digit authorization code and set aside funds for the recipient. The payee can then call an 800 number to verify that the funds are available. This is obviously great for fraud and cheque recipient protection.
“With FDIC insurance coverage, the ability to write checks (even with a pre-authorization requirement) and the increased funding capability, Bluebird has emerged as a very powerful free checking alternative,” Jim Marous, a senior vice president of corporate development at digital direct marketing agency New Control, told American Banker in March.
The Bluebird prepaid account was built on top of Amex’s Serve digital wallet platform. Amex and Wal-Mart began testing the card in late 2011, and launched the product a week after Wal-Mart put in place a system for reloading prepaid cards at cash registers.
With Walmart now owning Makro in South Africa it will be interesting to see whether this card ever comes to South Africa. For now, it’s another great prepaid success story.