Barely 24 hours into his new role as CEO at RushCard, Ron Hynes has found the silver lining to the company's 2015 technical glitch that led the company to pay a $20.5 million settlement.
The glitch occurred when switching processors, and temporarily froze thousands of consumer accounts. But despite the negative press and the cardholder settlement, few RushCard customers saw it as a reason to leave, according to Hynes.
“The resiliency of the RushCard customer base and their loyalty was unbelievable, and it made me realize there's much more we can do to expand new financial services to existing customers,” said Hynes, a longtime MasterCard prepaid card veteran. Hynes takes the CEO role from Rick Savard, who joined UniRush LLC (RushCard's parent company) in 2014.
This loyalty demonstrates that the traditional underbanked audience for RushCard would view the company as a trusted provider of other financial services, Hynes said. He also insists there’s untapped demand for prepaid cards among consumers with bank accounts.
“We see more and more mainstream consumers using prepaid cards as a way to control and segment their spending, and we want to tap into that at RushCard,” Hynes said.
Another of Hynes’ goals at Cincinnati-based RushCard will be working with co-founder Russell Simmons to expand the company’s reach beyond prepaid cards, possibly adding credit products.
“It’s no secret that the same people who are great customers for prepaid are the same folks who have limited or no access to affordable credit, and hopefully we will find a way to leverage the relationships we have with hundreds of thousands of customers to bring them some new options that may include credit,” Hynes said.
Millennials may be a prime target for RushCard’s expanded reach with credit, because credit cards have very low penetration now among younger consumers, he said.
“The emerging Millennial population will bank very differently than [older consumers], and they have needs for all types of financial services products, including credit, just like other segments of the population,” he said.
Simmons also signaled he sees opportunities to expand to new services.
“Under Ron’s leadership, I am convinced we will continue to grow and innovate while providing consumer-focused financial services that all types of customers can benefit from,” he said in a June 7 press release.
Hynes’ track record could be a boon for RushCard as it looks to reach a broader audience using new technology. Hynes most recently was president of global markets at mobile wallet provider Mozido, but he is primarily known as the top prepaid guy at MasterCard, where he worked in various roles from 2006 through 2014, rising to executive vice president of global prepaid solutions. Hynes got his start working with prepaid cards in 2002 at JPMorgan Chase & Co.
At Mozido and MasterCard, Hynes touted the power of new technology to drive broader financial inclusion, a philosophy he says dovetails with one of RushCard’s guiding principles.
“Prepaid is a product that provides tremendous flexibility for innovation, and we see lots of opportunities with it here,” Hynes said.
One thing still overhanging prepaid cards is a final version of new industry regulations from the Consumer Financial Protection Bureau. The CFPB announced its intention to regulate prepaid cards more than four years ago, and the proposed rule has grown to nearly 870 pages spanning all types of prepaid accounts. A final version of the rule, originally expected in December 2015, is due sometime this summer.
“The final regulations are long-awaited, but I’m hopeful that the result will be thoughtful and it won’t limit innovation. We want protection for consumers and we want to be sure the new regs don’t do anything to limit access to financial services products [like prepaid cards],” Hynes said.