J.P. Morgan Chase & Co. (JPM) is beginning to sell a prepaid
card in all 5,500 of its branches nationwide as the bank continues
its bid to replace lost revenue.
The Chase Liquid card is an alternative to a traditional debit
card in that it does not come with a checking account. The card can
be used anywhere Visa Inc. (V) cards are accepted, and it carries a
monthly fee of $4.95.
The largest U.S. bank by assets began testing the sale of the
card in about 200 branches in May. Prepaid cards have traditionally
been marketed to so-called underbanked consumers by alternative
financial-services companies like Green Dot Corp. (GDOT) and
Western Union Co. (WU), who sell their cards online and in
retailers like Wal-Mart Stores Inc. (WMT) and 7-Eleven Inc.
Mainstream lenders have shown more interest in offering the
products, though, as new regulations curb the amount of revenue
generated by traditional credit and debit cards. Some large-bank
executives, including Chase Chief Executive Jamie Dimon, have
argued the regulations would push consumers with smaller account
balances out of banks because lenders would be forced to increase
fees and other costs to service them.
Other mainstream lenders offering prepaid cards include American
Express Co. (AXP), U.S. Bancorp (USB) and Regions Financial Corp.
(RF). Some consumer advocates have worried banks would try to push
lower-income customers into prepaid cards, which can come with
numerous fees and fewer consumer protections in cases of fraud.
But some consumer advocates also said they liked Chase's prepaid
card because of its integration into the bank's branch network.
Chase executives have stressed its card comes with the same
benefits offered to its other customers, noting that the Liquid
card can be used to withdraw cash for free at any of Chase's 17,500
ATMs and its branch locations. Customers also can deposit funds
onto the card for free at a Chase teller or certain Chase ATMs
specially equipped to handle cash and check deposits.
The card "is a low-cost alternative to traditional checking
accounts and its convenience and pricing transparency sets a new
standard for prepaid cards," Ryan McInerney, chief executive of
consumer banking for Chase, said in a written statement.
Write to Andrew R. Johnson at andrew.r.johnson@dowjones.com