The Bancorp to be new issuing bank for NetSpend

Mon Jan 31, 2011 11:04am EST

* To start issuing prepaid cards with Bancorp in April '11

* NetSpend to continue discussions with other issuers

Jan 31 (Reuters) - Prepaid debit card firm NetSpend Holdings Inc NTSP.O said it signed an agreement with a division of The Bancorp Inc (TBBK.O), under which Bancorp would become the new issuing bank for both new and existing NetSpend card programs.

The prepaid debit card company, which competes with Green Dot Corp (GDOT.N), said it expects to begin issuing general-purpose reloadable prepaid debit cards in collaboration with Bancorp in April 2011.

NetSpend also said it is continuing discussions with other prospective banks under its previously stated goal of diversifying to at least three issuing banks.

The company, which went public last year, faced problems at the time of its IPO as Meta Financial Group (CASH.O), NetSpend's bank partner for about 71 percent of its prepaid cards, came under regulatory restrictions.

Austin, Texas-based NetSpend's shares, which have gained about 8 percent since their trading debut in October, were up about 2 percent at $14.31 on Monday on Nasdaq. (Reporting by Brenton Cordeiro in Bangalore; Editing by Roshni Menon)

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