Bank Freedom, a wholly owned subsidiary of PrepaYd announced that for the third quarter 2011, cardholder deposits on the company’s prepaid cards were approximately $50,600,000, a 357% increase from the $14,148,000 in the third quarter of 2010. Third quarter 2011 deposits for July were approximately $8,631,000, August was approximately $12,536,000 and September was approximately $29,442,000. Prepaid card deposits demonstrated steady and consistent growth month over month. September 2011 deposits increased approximately 701% from the same month last year. The company believes the steady increase in cardholder deposits is due to the substantial increase in card orders between June and September 2011.
The company recently announced that it completed a $2,000,000 equity raise in July 2011. Using funds from financing, the Company made crucial infrastructure upgrades and then began ramping up its prepaid card marketing efforts, in June 2011. The company believes the steady increase in cardholder deposits is due to the substantial increase in card orders between June and September 2011. The company did not release actual card order numbers, however, it stated new card orders steadily increased month over month between, June and September 2011; with September 2011 card orders increasing by approximately 700% from June 2011. Based on the cards that were recently issued, but not yet funded, and the company’s current run rate on new card orders, the company believes fourth quarter deposits will continue to show growth and significantly exceed the third quarter deposit results in 2011.
The Company earns revenue primarily on card usage, and anticipates the larger volume in cardholder deposits, will equate to increases in gross revenues, for the company. From the day the company’s prepaid card is ordered, there is a several month process to earning revenue. Some cardholders load funds within the first 30 days of card ordering, however many cardholders wait 60-90 days to add funds. Typically, once funds are added to the company’s cards, the cardholders immediately begin to use the cards and the company begins earning revenue from those cards. Due to the lag time from card order to card funding, the company anticipates a substantial increase in monthly revenue in the fourth quarter 2011.
“Since this is a recurring revenue based business and we focus on providing an excellent product, and a cost savings opportunity to our cardholders; we are willing to invest the time and money necessary to turn a card order into a profitable recurring revenue stream. Our recent equity investors knew what the company’s plan was and now we have demonstrated by our unprecedented increase in cardholders and cardholder deposits that we have put their money to good use. ” Stated Bruce Berman CEO of Bank Freedom and PrepaYd Inc.
About PrepaYd, Inc.
PrepaYd, Inc. is a provider of financial services in the prepaid debit card industry and is in the process of becoming a prepaid wireless phone provider. The company, through one of its wholly owned subsidiaries Bank Freedom, offers prepaid debit cards to America’s estimated 60 million underbanked citizens. In addition to the underbanked consumer demographic, small and mid-size businesses have found a much needed product with the company’s Prepaid Business Expense Card Program. With the diminishing credit card markets, companies need a new way to fund employees’ expenses other than through traditional credit cards or cash reimbursements. Through another wholly owned subsidiary PrepaYd Wireless, the company intends to offer mobile services to an estimated 110 million consumer demographic. Prepaid Wireless Services is an alternative to the traditional Postpaid Wireless Service Plans provided by major carriers. In addition, PrepaYd Wireless intends to make all of its available phones and wireless plans compatible for mobile financial services.