“Loaded with Benefits. Not Fees” their online ads read.  The bank and card network, which traditionally serves higher net worth and business clients, is moving downstream to reach to the underbanked mass market, they say, by introducing a general purpose reloadable prepaid card (GPR, in the jargon) last week.  It’s also cleverly dodging interchange fee caps, which are exempt for prepaid cards and small banks and credit unions.

I think the card is attractive, not just visually (four clean cool colors), but in pricing.  No setup fee, no monthly fees, free balance inquiry, even one comped Green Dot MoneyPack load (forth up to $4.95).  It carries a certain prestige – membership has its privileges, after all.

That said, it has real limitations: it does not (yet) allow direct deposit, so the only way to load funds today is through a bank account (so only useful for the banked), or through Green Dot’s reload network.  I found the online sign-up clunky and not nearly as nice as my Amex credit card online environment.  Perhaps most importantly, the card is only accepted where Amex is accepted, which is limited ESPECIALLY amongst smaller merchants or those catering to a lower-income customer.

My prediction is that the new Amex offering will serve to reduces prices in the general purpose reloadable industry, somewhat (and thereby improve the market for the underbanked), but largely be used by a banked user-base, who desires a separate spending account, or businesses for spending accounts (not the underbanked, despite Amex’ current marketing).