While not an exclusive agreement, it is an important event that marks the first step in NetSpend's Bank Diversification Strategy. NetSpend has been clear about its desire to find more bank partners. Last year, NetSpend's initial public offering was upset when the OTS issued a directive to MetaBank on the week that NetSpend had intended to
bring its shares to the market. At the time, MetaBank issued 71 percent of all outstanding NetSpend cards. NetSpend re-offered the shares in the following week. By any standard, the offering was a success, but the lesson was still apparent. NetSpend needs to diversify its bank partnerships.
Bancorp is a holding company, located in Wilmington, Delaware, with about $2 billion in deposits. Most of their deposit base goes to commercial lending. Bancorp is a top player in some unusual banking categories: they have a big presence in health-savings accounts and open-loop cards.
The new relationship kicks off in April. NetSpend says that this is part of a diversification plan that will ultimately move about 15 percent of its debit-card volume to new bank partners. That means that even with this change, NetSpend will remain actively involved with MetaBank.