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Prepaid credit card industry faces hurdles

August 1, 2012

The prepaid credit card industry is quickly becoming a crowded field, with many brands offering customers the merchant services options.

The prepaid credit card industry is quickly becoming a crowded field, with many brands offering customers the merchant services options.

The Wall Street Journal reports that some firms that specialize in providing these cards have faced struggles as of late. The source points to Green Dot, which has relationships with franchises including 7-Eleven, Walmart and others, saw its stock price cut in half last Friday. In a conference call, Green Dot’s chairman, president and CEO Steve Streit said that part of the problem was that no one knows what the future of the industry holds.

“We see a greater level of uncertainty going forward in our business as our market and the prepaid industry in general continues to evolve,” said Streit, according to the source.

According to some Wall Street analysts, Green Dot is a smart investment, given its recent stock plunge. In an article for Seeking Alpha, a blogger who goes by the name “Treasure Hunter” writes that he expects share prices for the firm to pick-up once investors and potential acquirers refocus on Green Dot’s dirt-cheap valuation.

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