NetSpend 2010 Annual Report Download - page 9

Download and view the complete annual report

Please find page 9 of the 2010 NetSpend annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 127

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127

Table of Contents
Business Strategy
We aim to be the leading provider of GPR cards and related alternative financial services to underbanked consumers. To achieve this goal,
we have developed a multi-pronged growth strategy that leverages our core capabilities to address expanding market opportunities for our
services.
Increase Cardholder Usage and Retention
We plan to increase cardholder usage and retention by increasing the number of our cardholders who direct deposit their wages,
government benefits or tax refunds onto their cards, as well as through marketing programs, product development, customer support and joint
marketing efforts with our distributors. We plan to continue to provide competitive pricing while adding functionality and complementary
products and services that will encourage underbanked consumers to use our cards as the equivalent of a traditional bank account over a longer
period of time.
Increase Penetration of the Underbanked Consumer Market
We plan to focus on further penetrating the existing underbanked consumer market and attracting new categories of consumers who are
dissatisfied with the traditional banking system by:
• increasing our retail card sales by providing superior product offerings and pricing for underbanked consumers seeking cash or
bank alternatives;
• developing new distribution relationships with leading national retailers and corporate employers;
• continuing to grow and diversify our reload network; and
• improving the effectiveness and efficiency of our direct-to-consumer and online marketing programs.
Leverage Our Technology Platform to Increase Profitability
Our end-to-end, proprietary technology platform provides us with attractive economies of scale, flexible product development capabilities
and speed to market with differentiated product offerings. In addition, we continue to drive new efficiencies in our business, such as the
continued integration of Skylight's infrastructure with our operational and technology platform. As we continue to increase our number of
active cards and the volume of transactions we process, we believe we will be able to increase our profitability.
Products and Services
GPR Cards
The GPR card is our core product. As of December 31, 2010, we had approximately 2.1 million active cards and our GPR cards were
responsible for approximately 97.7% of our total revenues for the year ended December 31, 2010. We consider a GPR card to be "active" if a
personal identification number, or PIN, or signature-based purchase transaction, a load transaction at a retailer location, or an ATM withdrawal
has been made with respect to such card within the previous 90 days. Marketed and processed by us and issued by our issuing banks, our GPR
card is a prepaid debit card tied to an FDIC-insured depository account maintained by us, with the funds held at an issuing bank on behalf of
the cardholder. Our GPR card represents the equivalent of a bank account for underbanked consumers and is marketed through our network of
retail distributors, our direct-to-consumer and online marketing programs and corporate employers as an alternative method of wage payment
rather than through bank branches. Our GPR cards can be used to make purchase transactions at any merchant
5