A prepaid debit card company is a business or better put a financial institution that specializes in issuing debit cards to clients. Please note that a prepaid debit card is similar to a gift card: It allows clients to spend whatever amount of money is stored on the card.

When the amount on the card is used up, you can arrange for a paycheck or other regular payment to be directly deposited onto the card, you can reload the card online or at an ATM, a participating store, or other physical locations.

The prepaid debit card business is part of the prepaid card industry and the global prepaid card market size was valued at USD 2.01 trillion in 2019 and is predicted to reach USD 18.47 trillion by 2030, with a CAGR of 22.5% from 2020 to 2030. So also, the Prepaid Cards market in the U.S. reached US$612.7 Billion in the year 2022. The country currently accounts for a 36.09% share of the global market.

Steps on How to Start a Prepaid Debit Card Business  

  1. Conduct Market Research

The first step in the market research process for your prepaid debit card business is to develop market-based research questions in line with your overall business goals and objectives. In this regard, you should source information that will help you maximize your business, help you operate your prepaid debit card business with less stress, and of course, build the business to profitability within the shortest time frame.

a. Who is the Target Market for Prepaid Debit Card Business?
  • Businessmen and women
  • Students
  • Employees
  • Entrepreneurs and Start-Ups
b. Is Prepaid Debit Card Business a Profitable Business?

Yes, the prepaid debit card business is very profitable, and the industry is predicted to reach USD 18.47 trillion by 2030.

c. Are There Existing Niches in the Industry?

No, there are no existing niche ideas when it comes to the prepaid debit card line of business because the business is a niche idea in the prepaid card industry.

d. Who are the Major Competitors?
  • American Express Serve Prepaid Credit Card
  • Vision Premier Visa Prepaid Credit Card
  • PayPal MasterCard Prepaid Credit Card
  • H&R Block Prepaid Emerald MasterCard
  • Green Dot Prepaid Visa and MasterCard
  • Kaiku Visa Prepaid Credit Card
  • Mango Prepaid MasterCard
  • Brink’s Money Prepaid MasterCard
  • AccountNow Prepaid Visa and MasterCard
  • READYDebit Visa Prepaid Credit Cards
  • Western Union NetSpend Prepaid MasterCard
  • BB&T Prepaid MoneyAccount
  • American Express Bluebird Prepaid Credit Card
  • JCB International Credit Card Co Ltd
  • Midnight Prepaid Visa® RushCard
  • Walmart MoneyCard® Visa® with Cash-Back Rewards
  • Sequin KLS Prepaid Visa® RushCard
  • Total System Services, Inc
e. Are There County or State Regulations or Zoning Laws for Prepaid Debit Card Business?

No, there are no county or state regulations or zoning laws for prepaid debit card businesses, but players in this industry are expected to work with the existing regulations governing similar businesses in the county or state where their business is domiciled.

It means that at any point in time, the county office can determine whether the prepaid debit card business meets the zoning rules for the community. They also ensure that all prepaid debit card companies are properly licensed by county or state agencies.

Please note that the Consumer Financial Protection Bureau (CFPB) is one of the most recognized of all the regulatory bodies that regulate prepaid debit card companies in the United States of America.

f. Is There a Franchise for Prepaid Debit Card Business?

No, there are no franchise opportunities for prepaid debit card business.

g. What Do You Need to Start a Prepaid Debit Card Business?
  • A Feasibility Report
  • Business and Marketing Plans
  • Business Licenses and Permits
  • Office Space
  • Computers, Laptops, and Servers
  • EIN (Employer Identification Number)/Federal Tax ID Number.
  • A Corporate Bank Account
  • Software Apps
  • Employees
  • Startup Capital
  1. Choose a Memorable Business Name

When looking to start a business, before you can begin to file the necessary documents with the constituted authorities or start your website, it is necessary that you come up with a name that you will be recognized with. It is essential that the name you come up with can easily be pronounced, is unique and easily memorable.

Some of the catchy business name ideas suitable for a prepaid debit card business are;

Creative Prepaid Debit Card Business Name ideas
  • Blue Gates© Prepaid Debit Card, Inc.
  • PP Aurey® Prepaid Debit Card, LLC
  • GO Cash© Prepaid Debit Card, Inc.
  • Debit Solutions® Prepaid Debit Card, Inc.
  • Cash Serve™ Prepaid Debit Card, Inc.
  • Fred Thompson™ Prepaid Debit Card, LLC.
  • Cash Doctor© Prepaid Debit Card, LLC
  • Edison Mack® Prepaid Debit Card, Inc.
  • High Bank© Prepaid Debit Card, Inc.
  • Garry Mackson© Prepaid Debit Card, Inc.
  • Bank Roll® Prepaid Debit Card, Inc.
  • Zenith Group® Prepaid Debit Card, Inc.
  • Fidelity Cash® Prepaid Debit Card, Inc.
  • Debit Zone® Prepaid Debit Card, Inc.
  • Sky Debit® Prepaid Debit Card, Inc.
  • Sally Abrahams© Prepaid Debit Card, Inc.
  • AB and Co™ Prepaid Debit Card, LLC
  • JP Norman® Prepaid Debit Card, Inc.
  • Baston Brown® Prepaid Debit Card, Inc.
  • Zeal Group™ Prepaid Debit Card, Inc.
  1. Register Your Business

a. What Type of Business Structure is Best for Prepaid Debit Card Business?

Even though there are several options when it comes to the business structure of a prepaid debit card business, the one that most players in this line of business consider is an LLC. It is common to consider an LLC because providers want to protect themselves from lawsuits.

Please note that an LLC will need an EIN if it has employees or if it will be required to file any of the excise tax forms listed below.

b. Steps to Form an LLC
  • Choose a Name for Your LLC.
  • File Articles of Organization.
  • Choose a registered agent.
  • Decide on member vs. manager management.
  • Create an LLC operating agreement.
  • Comply with other tax and regulatory requirements.
  • File annual reports.
c. What Type of License is Needed to Open a Prepaid Debit Card Business?
  • General Business License
  • Zonal Permits (Applicable in some cities)
  • Signage Permit
d. What Type of Certification is Needed to Open a Prepaid Debit Card Business?

These are some of the certifications you can work towards achieving if you want to run a prepaid credit and debit card company;

  • Certified Financial Expert (CFE)
  • Certificate in Finance and Technology
  • Financial Literacy Certification: NFEC CFEI
  • Degree in Finance Related Courses.
e. What Documents are Needed to Open a Prepaid Debit Card Business?

These are some of the basic legal documents that you are expected to have in place if you want to legally run a Prepaid debit card business in the United States of America;

  • DBA
  • EIN
  • Business and liability insurance
  • Federal Tax Payer’s ID
  • State Permit and Building Approval
  • Certificate of Incorporation
  • Business License
  • Business Plan
  • Employment Agreement (offer letters)
  • Operating Agreement for LLCs
  • Insurance Policy
  • Online Terms of Use
  • Online Privacy Policy Document
  • Contract Document
  • Company Bylaws
  • Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?

If you are considering starting a prepaid debit card business, usually you may not have any need to file for intellectual property protection or trademark. This is because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.

  1. Cost Analysis and Budgeting

a. How Much Does It Cost to Start a Prepaid Debit Card Business?

When it comes to starting a prepaid debit card business, the startup costs could range from $250,000 to over $500,000 depending on how big you want the business to be.

b. What are the Costs Involved in Starting a Prepaid Debit Card Business
  • The total fee for registering a business in the United States of America – $750.
  • Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines, and other software) – $3,300.
  • Marketing expenses for $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
  • The total cost for hiring a business consultant including writing a business plan – $2,500.
  • The total cost for the purchase of insurance (general liability, workers’ compensation, and property-casualty) coverage at a total premium (initial (first) premium) – $2,400.
  • The cost for renting or leasing operational office space – $85,000.
  • Operational Capital – $250,000
  • Other start-up expenses like commercial satellite TV subscriptions, stationery ($500), and phone and utility deposits ($2,800).
  • Operational cost for the first 3 months (salaries of employees, payments of bills, and software renewal fees et al) – $35,000
  • The cost for the purchase of software apps: $10,000
  • The cost for store equipment (cash register, security, ventilation, signage) – $1,750
  • The cost of purchase and installation of CCTVs: $2,000
  • The cost of launching a website: $2000
  • Miscellaneous: $2,000
c. What Factors Determine the Cost of Opening a Prepaid Debit Card Business?
  • The size of prepaid debit card business
  • The choice of location
  • The required licenses and permits
  • The type of facility
  • The additional service offerings
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?

You don’t need to build a facility for your prepaid debit card business because it is a business that can be operated from a leased or rented office space or home office.

e. What are the Ongoing Expenses of a Prepaid Debit Card Business?
  • Utility bills (internet subscriptions, phone bills, signage, and software renewal fees et al)
  • Transport and logistics
  • Salaries of employees
f. What is the Average Salary of your Staff?
  • Chief Executive Officer (President) – $65,000 Per Year
  • Human Resources and Admin Manager – $37,000 Per Year
  • Accountant – $36,000 Per Year
  • Laison Officer – $34,500 Per Year
  • Sales and Marketing Executive – $30,000 Per Year
  • Client Service Executive (Help Desk Office) -$28,000 Per Year
g. How Do You Get Funding to Start a Prepaid Debit Card Business?
  • Raising money from personal savings and sale of personal stocks and properties
  • Raising money from investors and business partners
  • Sell shares to interested investors
  • Applying for a loan from your bank/banks
  • Source for soft loans from your family members and your friends.
  1. Write a Business Plan

a. Executive Summary

Zenith Group® Prepaid Debit Card, Inc. is a standard prepaid debit card business that will be based in New York City, New York, but operate all over the United States via our online portal and app. The company has been able to secure a standard and well–positioned office facility in a conducive business district in Brooklyn, and that is where we intend to coordinate all our business activities from.

We are a prepaid debit card business that is set to compete in the highly competitive industry not only in the United States market but also in the global market.

b. Products and Service
  • Issuing prepaid debit and credit cards
  • Providing reloading services
  • Issuing replacement of debit and credit cards
  • Providing financial advice to individuals and small businesses.
c. Mission Statement

Our mission is to provide professional and highly reliable prepaid debit card services that will assist businesses, individuals, and busy corporate executives in effectively managing their money. We want to build a prepaid debit card business that can favorably compete with other leading brands in the industry.

Vision Statement

Our vision is to establish a standard prepaid debit card business whose services and brand will not only be accepted in New York City, New York, but also throughout the United States of America.

d. Goals and Objectives

The goals and objectives of the prepaid debit card business are to help businesses and individuals manage their money safely and conveniently.

e. Organizational Structure
  • Chief Executive Officer (President)
  • Human Resources and Admin Manager
  • Liaison Officer
  • Accountant
  • Sales and Marketing Executive
  • Client Service Executive (Help Desk Office)

Marketing Plan

a. SWOT Analysis
Strength:
  • Excellent operational history
  • Robust relationships with key stakeholders
  • Experience and trained professionals.
  • Excellent customer testimonials (trust).
  • Reliable and efficient business processes (makes it easy for you to manage your money on the go with our mobile solutions).
Weakness:
  • The owner is new to large scale marketing
  • Lack of economies of scale.
Opportunities:
  • Increase in the demand for the services offered by prepaid debit card companies.
Threat:
  • Loans diminish profitability until they are paid off
  • The first year will be financially tight while we gain customers and pay off loans
  • Competition in the area could increase
  • Management of employees requires time, money, and efforts
  • The regulatory department could change its regulatory status and decide to enforce strict regulations that can strangulate new businesses.
b. How Do Prepaid Debit Card Companies Make Money?

Prepaid debit card companies make money from commissions, service charges (card charges), card replacements, and of course investment.

c. Payment Options
  • Payment via bank transfer
  • Payment with cash
  • Payment via credit cards
  • Payment via online bank transfer
  • Payment via check
  • Payment via mobile money transfer
d. Sales & Advertising Strategies
  • Introduce your prepaid debit card business and the services your offer by sending introductory letters alongside your brochure to corporate organizations, universities, colleges, and other key stakeholders throughout the city where your prepaid debit card business is located.
  • Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across
  • Create a basic website for your business so as to give your business an online presence
  • Directly market your services
  • Advertise your business in community-based newspapers, local TV and radio stations
  • List your business on yellow pages ads (local directories)
  • Encourage the use of word-of-mouth marketing (referrals)

Financial Projection

a. How Much Should You Charge for your Product/Service?

The fees that prepaid debit card companies charges vary in cost. You can typically expect to pay from $1 to $9.95 for the upfront card purchase fee. Monthly fees typically go up to $9.95. Please note that there may be additional fees whenever you want to “reload” the card by putting more money on it. Another point to note is that, when you use the card at an out-of-network ATM, there are fees associated with the transaction.

b. How Much Profit Do Prepaid Debit Card Business Owners Make a Year?

There is no fixed amount the owner of a prepaid debit card business is expected to make. But on average, they should expect to make well above $65,000 annually.

c. What Factors Determine the Amount of Profit to Be Made?
  • The capacity of the prepaid debit card business
  • The location of the prepaid debit card business is covering
  • The management style of the prepaid debit card business
  • The business approach of the prepaid debit card business
  • The advertising and marketing strategies adopted by the prepaid debit card business facility – business
  • The number of years the prepaid debit card is in business
d. What is the Profit Margin of a Prepaid Debit Card Business?

The profit margin of a prepaid debit card business is not fixed. It could range from 4 percent to 20 percent.

e. What is the Sales Forecast?

Below is the sales forecast for a prepaid debit card business it is based on the location of the business and other factors as it relates to such startups in the United States;

  • First Fiscal Year (FY1): $450,000
  • Second Fiscal Year (FY2): $1.3 million
  • Third Fiscal Year (FY3): $2.1 million
  1. Set Up your Office

a. How Do You Choose a Perfect Location for Prepaid Debit Card Business?
  • The demography of the location especially as it relates to small and medium scale businesses
  • The demand for the services of prepaid debit card companies in the location
  • The purchasing power of businesses and residents of the location
  • Accessibility of the location
  • The number of prepaid debit card companies in the location
  • The local laws and regulations in the community/state
  • Traffic, parking and security et al
b. What State and City are Best to Open a Prepaid Debit Card Business?
  • New York City, New York
  • Los Angeles, California
  • Las Vegas, Nevada
  • Dallas, Texas
  • Columbus, Ohio
  • Oklahoma City, Oklahoma
  • Chicago, Illinois
  • Boston, Massachusetts.
  • Miami, Florida
  • Washington DC
  • San Francisco, California
c. What Equipment is Needed to Operate a Prepaid Debit Card Business?

You should be prepared to purchase software applications, computers and laptops, servers,  storage, telephone, fax machine, and office furniture (chairs, tables, and shelves) amongst others.

  1. Hire Employees

When it comes to hiring employees for a standard Prepaid debit card business, you should make plans to hire a competent Chief Executive Officer (President), Human Resources and Admin Manager, Sales and Marketing Executive, Accountant, Laison Officer, and Client Service Executive (Help Desk Office).

  1. Launch the Business Proper

In recent times, no prepaid debit card business opens its door for business without first organizing an opening party to officially launch the business. You can choose to do a soft opening if you are operating on a low budget or you can go for a grand opening party.

The bottom line is that with a proper launching of the prepaid debit card business, you will officially inform people in your city that your prepaid debit card business is open for business.

a. What Makes a Prepaid Debit Card Business Successful?
  • Attention to details
  • Willingness to take chances
  • Tenacity
  • Customer-centric business approach
  • Good marketing approach
  • Strong vision
  • Passionate leadership
  • Empowered employees.
b. What Happens During a Typical Day at a Prepaid Debit Card Business?
  • The office is open for the day’s work
  • The to-do list is reviewed
  • Employees go straight to their job description (processing of debits cards transactions, resolving transaction issues for clients, issuing damaged or misplaced debit cards, offering financial advice et al)
  • Marketers go out to market the service offerings of the company
  • Reports are written and submitted to superior officers
  • The business is closed for the day.
c. What Skills and Experience Do You Need to Build a Prepaid Debit Card Business?
  • Excellent prepaid debit card administrative skills
  • Excellent computer skills
  • Ability to Pay Attention to Details
  • Good managerial and human development skills
  • Good Accounting and Bookkeeping Skills
  • Visionary Leadership
  • Team-building & Interpersonal Skills.
  • Excellent communication and negotiation skills.
  • Organizational skills.
  • Problem-solving ability.
  • Good Supervisory skills
  • Experience in managing prepaid debit cards related services business
  • Experience in the financial services industry
  • Experience in business administration
  • Experience in handling relevant prepaid debit card software.