As the prepaid debit card niche goes mobile, Plastyc Inc. is trying to stay ahead of the pack.

The New York-based firm has no celebrities nor any deals with convenience stores or mass merchants to distribute its reloadable prepaid debit cards, but it claims an advantage over rivals: Plenty of smartphone users.

In response to research suggesting that 75% of its customers have smartphones, Plastyc on March 13 rolled out a smartphone app enabling holders of Google Inc. Android and Apple Inc. iPhone devices who lack traditional bank accounts to perform services previously available only through a Web browser.

And unlike some more bare-bones providers operating entirely through online channels, Plastyc’s mobile app offers what it says is the broadest range of banking services to customers, including the option of paying by paper check.

“A lot of our customers have limited access to the Internet via a regular PC, and they want a full range of banking services, including the ability to mail a real check to someone like a landlord, and they want to do it all through their smartphone,” Plastyc CEO Patrice Peyret says.

While he acknowledges that demand for mailing paper check payments is small, Peyret says the feature, which is built into the new app and integrated with payment calendars and alerts, is the kind of “more sophisticated” mobile apps Plastyc’s prepaid card customers are asking for.

Plastyc charges $2 for each paper check it mails for customers; it waives the fee for certain customers using the most features, Peyret says.

And in the niche of prepaid card providers that operate entirely through online channels, being first in the fast-growing mobile channel may be an advantage as competition heats up (see story).

Plastyc’s primary competitors include AccountNow, UniRush LLC’s RushCard and ReadyCredit Corp.

Peyret does not see larger providers that target a mass audience through retail channels, such as Green Dot Corp. and NetSpend Corp., as direct rivals.

The privately held company has “under 1 million” customers, Peyret says, declining to disclose actual figures.

“We have low overhead and our technology is better, so that customers who want full services through a prepaid card will find us,” Peyret says.

The company advertises online and also does some local advertising on cable TV and through posters in urban areas where “mobile, unbanked types of customers live and work,” Peyret says.

Analysts suggest growth may be tough to eke out in a market that is quickly maturing.

While fewer new players are entering the fray, Peyret believes there is still significant growth potential among unbanked consumers seeking prepaid card services.

“The time when everybody and their dog could start a prepaid card company is coming to an end as the boom of creation of new prepaid card programs is mostly over,” Peyret says.

And as the range of players in the prepaid arena stabilizes, “there is downward pressure on fees and more regulatory scrutiny” coming, he notes.

The Senate Banking Committee on March 14 convened a hearing to examine prepaid card practices (see story).

Plastyc is among prepaid debit card providers that agreed to test a new, voluntary fee-disclosure box the Center for Financial Services Innovation proposed March 13 (see story).

The industry’s next challenge will be competing for customers looking for specific types of banking services and at rock-bottom cost, Peyret suggests.

By targeting a specific niche of customers that want diverse financial services options through a largely virtual channel, Peyret also believes his customers may stick around longer, leading to greater profitability.

“The typical life of a prepaid card is measured in months, but by providing superior apps and technology we plan on keeping people for the long term, which is the key to turning a profit in this industry,” he says.

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