Catalina Card Services Ties Discounted Mobile Services To New Card.(News)

Byline: Will Hernandez

Catalina Card Services Inc. is attempting to differentiate itself in the crowded general-purpose prepaid debit card market with a product that offers cardholders low-cost mobile phone services.

The Danville, Calif.-based prepaid card provider has an agreement with Simple Mobile Inc. that enables cardholders to sign up for an unlimited talk, text and Internet-access plan for $45 per month, $15 per month less than what Simple offers other consumers for the same package.

Simple Mobile deducts the monthly bill from the cardholder's prepaid account.

The Simple offer is necessary to help Catalina compete with more well-known prepaid providers and to create stickiness around the MasterCard-branded InFusion card, which launched Jan. 11, contends Matt Montes, Catalina president.

"You're always looking for ways to add value and persistent use to these cards," Montes tells PaymentsSource.

The Simple Mobile offer will be available next month after Catalina switches from Galileo Processing Inc. to Fidelity National Information Services Inc. for transaction processing. MetaBank issues the cards.

Montes, who founded prepaid marketer AccountNow Inc., saw more consumers use his former company's cards when it added mobile minute top-ups. The majority of consumers' monthly spend went to mobile services, he says.

Catalina plans to add other services such as discounted automobile insurance rates. As with the Simple Mobile deal, Montes wants to negotiate lower rates for InFusion cardholders.

"We have to do things that distinguish ourselves from the competitors out there and give more value," Montes says.

Brian Riley, a research director in the bank cards practice at TowerGroup, believes Catalina has the right idea with its add-on services.

"A big challenge in the industry at the moment is building long-term use of these cards," he says. "This is a step in the right direction for Catalina."

Catalina has two card-fee structures. Cardholders who use direct deposit receive a free card with a $3.50 monthly maintenance fee. Other users pay $6.50 for the card plus $6.50 monthly. Catalina charges cardholders $1.50 for all ATM cash withdrawals. Signature-debit transactions are free. PIN-debit purchases are 50 cents each.

The PIN-debit brands that appear on the card include Maestro, Cirrus, Interlink, Star and Plus.