Star Network, one of the nation’s largest transaction-processing networks (and one which all ATM Network machines have access to), has rolled out a new service: allowing Star-branded prepaid cards to be “topped off” at an ATM.
While many of Star’s prepaid cards are payroll cards that are reloaded through direct deposit, the market for the new service, dubbed Star Reload, is the “spontaneous reload,” Saville says. That would include cash, miscellaneous checks consumers receive, and DDA account transfers. Most reloads at POS locations are likely to involve only cash. At ATMs, “the form of the deposit is up to the ATM deployer,” says Saville. Star Reload ATMs and other locations will have a special logo indicating the service is available.
A major target audience for this service are the “unbanked” — people without checking accounts. Without a bank account, everything from paychecks to cash payments can turn into a hassle. Cashing checks can often involve a large fee at a check-cashing business, and walking around with large amounts of cash causes its own problems.
Some unbanked workers are issued payroll cards, with the worker’s paycheck automatically added to the card’s balance through direct deposit. Star’s new service would let those workers take other payments they’ve received — cash, check, money order — to a nearby merchant and have the value of those payments added to the card. But it could be used by people without payroll cards as well — any Star-branded prepaid card would work.
For merchants, it’s a way to draw people into their stores and earn incremental revenue by charging a small fee for the reload service. On the other hand, in order to reach the core unbanked audience, their ATM will have to be capable of accepting deposits, not just dispensing cash. The service will let people electronically transfer funds from bank accounts to their prepaid card, but that market is probably pretty limited — people with bank accounts probably have debit cards, and little need to use a prepaid card.
A big factor in the success of the new service will be pricing, which Star has not yet disclosed.
