PE Tech Report

NEWSLETTER

Like this article?

Sign up to our free newsletter

Prepaid Card Holdings seeks institutional investment from private equity firms

After a ten month due diligence and integration process, Prepaid Card Holdings’ operating subsidiary has launched and is currently issuing and managing prepaid card programmes on a Tier 1 processor.

The operating subsidiary first began issuing prepaid debit cards in February 2008 on another processing platform.

The company believes the launch on a Tier 1 processing platform is an important asset to the company’s future and a condition precedent to its ability to attract an institutional investment in today’s market.

 “A prepaid debit card company must have a reliable institutional size processor if it wants to attract an institutional investment. We now issue prepaid cards on the same processor of a prepaid debit card company that stated to have received over USD24,000,000 in funding, as well as another prepaid debit card company that stated to have received USD7,000,000,” says Bruce Berman, chief executive of Prepaid Card Holdings.

Besides being a provider of debit card processing, the company’s processor delivers banking and payments technologies to more than 14,000 financial institutions and businesses in over 100 countries worldwide, and maintains processing and technology relationships with 40 of the top 50 global banks, including nine of the top ten. The processor employs more than 30,000 on a global basis and is listed on the New York Stock Exchange.

"It’s a real catch-22 out there. Institutional investors have expressed a desire to invest in prepaid; unfortunately the prepaid segment of the payments industry is still in its infancy so most prepaid companies that desire funding don’t meet the stringent investment criteria most institutions require," says Berman.

"Financial institutions looking to enter the prepaid space also have to weigh the ‘buy versus build’ model because until you have experienced firsthand the building process, it’s impossible to understand how long the process takes to get fully operational let alone profitable in the prepaid space. Prepaid cards is one of the fastest growing segments of the payment industry. With our infrastructure, payments industry experience, multitude of successful prepaid card programmes, key contractual relationships, and proven business model we hope to create the exception to the catch-22 rule so we can raise capital and grow our business faster.”

Like this article? Sign up to our free newsletter

MOST POPULAR

FURTHER READING

Featured