The Center for Financial Services Innovation has released a new research paper titled "Retailers as Financial Services Providers: The Potential and Pitfalls of This Burgeoning Distribution Channel" (PDF).

The report, authored by CFSI's Senior Analyst, Katy Jacob, assesses the business and policy implications for both the financial services and retail industry as banks and retailers both partner and compete with each other in their efforts to provide financial services via retail locations.

MasterCard has announced that it is holding its third annual Stored Value Forum today and tomorrow.

"Long gone are the days when prepaid was solely synonymous with long distance calls or store-bought gift certificates. Today prepaid cards are mainstream financial products applicable to virtually every type of transaction, in virtually every payment category, including consumer, business, and the public sector," said Ted Dargan, Vice President, Stored Value Team Lead for the Americas, MasterCard International.

"Prepaid cards can take on cash and checks where traditional credit or debit card programs may not fit the payment need. We estimate that the prepaid opportunity in the U.S. alone is more than $2.5 trillion."

$2.5 trillion is about what is currently spent annually in the US on Visa and MasterCard branded cards combined.

Jennifer Tescher and Katy Jacob write for Banking Strategies on bank use of stored value card products.

Alternative financial services providers tout stored value cards (SVCs) as the “un-bank account” to lure underbanked consumers who are turned off by — or have been turned away from — traditional banks. But as banks focus on the potential value of underbanked consumers, they are finding that SVCs can be a potent tool to initiate, extend and enrich their customer relationships, transforming SVCs from a niche product into one with broader appeal.

Eileen Alt Powell reports for AP on a study released yesterday by college lender Nellie Mae that said the percentage of undergraduate students with credit cards in 2004 was 76 percent as compared to 83 percent in 2001.

They carried an average of four cards last year, and their outstanding balances averaged a total of $2,169. While a seemingly hefty number, that was down significantly from $2,327 in 2001 and $2,748 in 2000, though up from the $1,879 average balance of 1998, according to study.

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