JPMorgan Chase is seeking a buyer for its corporate payroll, tax refund and health-savings prepaid card business.
The bank's decision to explore a sale of those product lines does not affect any consumer payment cards, including credit, debit or the Liquid prepaid card, the bank says in a Jan. 9 press release.
When contacted, JPMorgan Chase declined to comment further on the potential sale or any effect a recent hacking incident might have had in the decision. In early December, the bank warned an estimated 465,000 prepaid cardholders of the potential that personal data had been accessed.
Chase's announcement is "purely a business decision," says Madeline K. Aufseeser, senior analyst with Boston-based Aite Group. "Other companies are in a better position to more aggressively manage this than what JPMorgan can do. Operationally, prepaid payroll is really difficult to manage."
The consumer cards are not affected because they operate under separate management teams and technology, Aufseeser adds.
"It should be an easy business to sell, there are a lot of big players in that market," Aufseeser says, noting that First Data, Bank of America, ADP and U.S. Bank might be logical suitors. "U.S. Bank has a processing platform in place for payroll prepaid," she adds.
Chase's prepaid card business includes all corporate, U.S. public sector and electronic benefit transfer programs as well as the health savings accounts, the bank says. JPMorgan will no longer solicit or accept any new prepaid card business. Cardholders of any corporate prepaid cards should continue to use those cards until further notice, the bank says.