After months of testing a method by which ATMs can dispense prepaid cards, Better ATM Services is rolling out the service to all of its clients.

Late last year, Credit Union West, MariSol Federal Credit Union and Pinal County Federal Credit Union piloted the system by offering their members cards loaded with $25.

The cards are as thin as a transit card, which is more easily dispensed by an ATM. The pieces of plastic come on a perforated sheet that is about the size of a dollar bill. During the trials, those sheets included a coupon and customer service information. 

"The approval [we got from Visa] is for prepaid, and that's one of the big things coming out now," says Todd Nuttall, chief executive of Better ATM Services. "While we aren't doing [general purpose reloadable cards] can deliver [prepaid cards] in a different way."

Better ATM Services has been developing this project for roughly five years.
 The Mesa, Ariz., technology vendor made the announcement Tuesday at the 20th Annual ATM, Debit & Prepaid Forum in Phoenix, Ariz. The company itself launched at the 2006 Card Forum & Expo, a SourceMedia Inc. conference. (SourceMedia publishes PaymentsSource)

Nuttall says that banks can strengthen their relationships with customers by offering them gift and prepaid products where it's most convenient — in drive-thru and walk-up ATM locations.

Today, he asserts, most of those customers leave a bank branch and walk down the street to a big box retailer or convenience store.

It's true banks are feeling pressure to issue prepaid cards, if for no other reason than to better compete with recent upstarts that are now marketing their stored value cards as checking account alternatives.

Earlier this month, American Express launched its Bluebird account with Walmart. The partnership has created a nearly fee-free checking alternative that has the potential to shake the financial services industry — potentially pulling in customers unsatisfied with their banks. 

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