Pioneers of prepaid helped bring financial options to underserved clientele

May 7, 2018

This piece presented by MetaBank.

In May 2004, five co-workers left one bank to join another. What formed as a result of that relationship is one of prepaid’s largest and most successful companies, which helped shape an entire industry along the way.

Meta Payment Systems is considered by many to be one of the pioneering companies of the prepaid industry. As president of Meta Financial Group, MetaBank and Meta Payment Systems, Brad Hanson was instrumental in creating its future success, and he continues to be viewed as an industry innovator.

Under Hanson’s leadership, MetaBank has grown into one of the largest prepaid card issuers, ACH originators and ATM sponsors in the world.

“Successful people learn from their mistakes, and I’ve definitely made my fair share, but we never gave up,” Hanson said. “I am very grateful for the opportunity to work with so many outstanding people and help build such a great organization. Most of all, I’m proud of the jobs we’ve created and the chance to help develop valuable financial services for so many people who otherwise may have been left out.”

After graduating from Lincoln High School in Sioux Falls, Hanson joined the South Dakota National Air Guard and earned his degree in economics from the University of South Dakota. It was at his first job – managing Rent-to-Own stores – that he first began to understand the unique challenges faced by unbanked and underserved consumers. He met people whose needs often outweighed their means and whose lack of financial literacy often contributed to poor financial decisions and inferior access to the kinds of quality financial tools that most of us take for granted.

Brad Hanson

Hanson soon found a job at BankFirst in Sioux Falls, where he learned about banking and payments. When the bank decided to develop a credit card program, Hanson helped set up the operations, technology, application processing, call center and collections activities. As the program grew, Hanson focused his attention on project management and technology.

“I started my banking career in credit cards, focusing primarily on subprime issuance,” he said. “The bank began to limit its growth in subprime credit cards, and I was asked to look into other areas where we could grow our business.”

During his research, he noticed some companies were showing interest in gift cards as an alternative to paper gift certificates, so he contacted WildCard Systems, a card processor developing gift cards and prepaid card solutions. WildCard was looking for a bank to support the development of a new product, FSA cards, which would allow consumers to access their health care Flexible Spending Account benefits more simply and efficiently.

Before these cards were introduced, employees had to pay for their medical services out-of-pocket and request reimbursement from their employer’s FSA plan. This was a burden on the finances of many consumers, especially those living paycheck-to-paycheck. Using the card, employees could access their plan to pay for services up-front and automatically resolve their claims using technology.

“I was lucky versus smart. I was in the right place at the right time and had the right people around me.”

WildCard was having trouble finding a bank to support the product. Hanson quickly identified the opportunity and worked to gain approval for the bank’s support. He soon realized the model could be extended to other processors and third parties looking to develop unique payments solutions. He also began to realize how these products could help fulfill another passion of his: providing unbanked and underserved consumers with access to financial services they desperately needed by offering prepaid cards as an alternative to traditional checking accounts.

In early 2004, Hanson and his team decided find a new bank to develop their program and met with Tyler Haahr, CEO of MetaBank, where it quickly became clear that this was the best option for Hanson and the team. They worked to develop the compliance, money-flow management and consumer-protection initiatives that would come to differentiate Meta from other prepaid companies.

“I knew that my team did not want to leave Sioux Falls, and we needed a bank that would give us the autonomy to develop our program,” Hanson said. “Thanks to Tyler’s foresight, we found that here.”

Linda Loof was one of the first employees to join Hanson and the prepaid team at MetaBank.

“I joined Brad and his team in 2004 shortly after the partnership with MetaBank. I’ve worked in several different partner-facing roles during my career at Meta. No one has given me the opportunity or encouragement to explore and be innovative the way Brad has. He taught me and others to find solutions to business questions that leave all parties satisfied with the results. I give him a lot of credit, not just for my personal and professional development, but also as a leader for the prepaid industry. His guidance and input helped foster collaboration among industry players and helped shape the industry and Meta to what it is today.”

Hanson is a founding member of the Network Branded Prepaid Card Association, a trade group for the prepaid industry. He received the Paybefore Industry Achievement Award in 2009. Meta’s passion for the underserved connected him with John Hope Bryant and Operation HOPE, which led to Meta’s $1 million contribution in 2015. Hanson currently serves as a board member for the Operation HOPE Midwest Region.

Marilyn Bochicchio has witnessed Hanson’s industry influence first-hand. She formerly served as CEO of Paybefore, the prepaid industry’s cornerstone publication, and later founded Hidden Brain, a communications consultancy group focusing on prepaid clients.

“Brad is the ultimate supporter of what’s good for the industry. He is one of the deepest thinkers of all the prepaid executives I worked with and very conscious of the industry. He was constantly driving efforts of where we should be going.”

Hanson and Bochicchio have a relationship going back over a decade and often served on panels together at industry conferences.

“The prepaid industry needed him to be involved because he was always fair and true and kept us on the right path,” she said. “He set the compass for doing the right thing for consumers and other users of prepaid, including businesses and government, consistently reminding his industry peers that if you develop and promote prepaid products that truly serve your users, good things will follow. And he’s always relentlessly challenging himself and his colleagues to take prepaid to the next level to serve our users even better.”

So where does a pioneer go next?

“Prepaid is definitely still a growing segment. Gift cards are reaching a point of maturity, but that just pushes innovation into other applications like payroll or general purpose cards,” Hanson said. “Emerging categories are evolving too: plastic to virtual cards that can be distributed and stored on a mobile device is one example of where the industry is moving. The key is to improve customer satisfaction and create a better value proposition.”

He calls it an exciting time in the industry as he continues to look toward what’s next.

“We’ve got emerging payments technology like blockchain and AI. They’re still immature, but the industry is trying to figure out the best way to utilize them.”

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Pioneers of prepaid helped bring financial options to underserved clientele

In May 2004, five co-workers left one bank to join another. What formed as a result of that relationship is one of prepaid’s largest and most successful companies — based in Sioux Falls.

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