Gross dollar volume on prepaid and other debit cards issued by The Bancorp Bank grew 15% year-over-year in the second quarter, and the bank expects volume growth will exceed that rate in 2024 as it expands existing programs and books new partners.
Dollar volume hit $32.8 billion for the quarter, up $4.38 billion from 2022’s second quarter. “Key areas of growth are neobanks, health care, and new corporate payment programs,” Damian Kozlowski, president and and chief executive of The Bancorp Inc., the bank’s Wilmington, Del.-based parent company, said Friday morning on a quarterly earnings call with analysts. The Bancorp Bank bills itself as the nation’s largest provider of prepaid cards.
One of those neobanks Kozlowski mentioned is Chime Financial Inc., a San Francisco-based online banking-services provider that in June extended and expanded its existing relationship with The Bancorp. Under the agreement, The Bancorp holds deposits Chime gathers and provides private-label banking services. Another big Bancorp client is PayPal Holdings Inc.
New or expanded products and services The Bancorp aims to provide to its fintech partners include early-wage access, so-called credit-builder services, and free overdrafts for consumers in some cases, among others. And corporate payments, a niche the company got into “in a big way” last year, has been a win, according to Kozlowski, without naming any clients. “It’s really exceeded our expectations,” he said of corporate payments.
Fees and other non-interest income from prepaid, debit, automated clearing house, and other payments sources grew 10% from 2022’s second quarter to $25 million, The Bancorp reported. The only prepaid segment to decline in volume in the second quarter was general-purpose reloadable, Kozlowski said.