Sterling HSA's agreement with Metavante Healthcare Payment Solutions means Sterling has formed a partnership with a company that has invested heavily in its health savings account business over the past five years.
"Sterling HSA can go to market, knowing that it has a strong processing vendor beside it," Red Gillen, senior analyst for Celent LLC, a New York-based consulting firm, tells ATM&Debit News.
A top Metavante Healthcare Payment Solutions executive agrees with Gillen's assessment. "We have a strong focus on this business," says Tom Torre, senior vice president and general manager of consumer directed health care. "We keep building out on our capabilities."
One of Metavante's most-significant purchases occurred in 2005 when the company purchased Med-i-Bank Inc., a Waltham, Mass.-based health care account debit card vendor, for $145 million. That purchase opened the door to the creation of Metavante's MasterCard-branded WealthCare debit card, which Metavante will offer to Sterling HSA's accountholders beginning Aug. 12. Metavante offers the WealthCare card to nearly 6 million individuals at close to 200 institutions, Torre says. WealthCare, however, is not exclusively an HSA card, it also supports health reimbursement arrangement and flexible spending accounts. Metavane does not breakout the percentage of WealthCare cards that serve HSAs, but Torre says it is becoming more "meaningful."
Sterling HSA on Tuesday announced the signing of an exclusive, multiyear agreement with Metavante Healthcare Payment Solutions, a division of Milwaukee-based Metavante Technologies Inc. Metavante wil contract with M&I Bank to issue WealthCare cards to Sterling HSA's accountholders, says a Metavante spokesperson.
Unlike its rivals, Sterling HSA, which is based in Oakland, Calif., is not a bank, but a company that administers HSAs, Gillen notes. Sterling HSA's much-larger rivals, which include Wells Fargo & Co. and Optum Health Financial, are banks that issue debit cards and administer HSAs.
According to the agreement, Metavante will process transactions on its WealthCare card for holders of Sterling HSAs. The company has 30,000 accountholders and $50 million in HSA assets, says Nancy Brumfield, a Sterling spokesperson. This year, individuals can deposit a maximum of $3,000 into their accounts, and families can deposit a maximum of $5,950.
Sterling HSA switched to Metavante's WealthCare card from the Evolution Benefits HSA card because of Metavante's commitment to HSAs and because Sterling HSA considers the card "state-of-the art." Metavante WealthCare card is a "multi-purse" card that stores financial data both for HSAs and FSAs.
Individuals deposit funds into their HSA accounts and use the debit card to pay for what the IRS says are qualified medical expenses, such as doctor visits, Brumfield says. HSAs are tax-deferred plans, and about 8 million individuals are enrolled in the programs, according to the Center For Policy Research.
"Consumers would rather pay with the card instead of paying with cash or writing a check," Brumfield says.
Banks also benefit because they receive interchange revenue from debit card transactions, Gillen says. ATM