NetSpend 2011 Annual Report Download - page 8

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effectively manage their budgets through our personal finance management tools. Our interactive voice response systems also provide account
information and allow cardholders to activate their accounts and perform a range of transaction activities. In addition, we provide our
cardholders with a text message service that automatically sends balance and transaction information to enrolled cardholders' mobile phones
and allows them to interact with their account by sending text messages to us. We believe we were the first prepaid debit card provider to
provide text message services to cardholders.
The GPR cards we market through corporate employers are promoted to their employees as an alternative method of wage payment and
are designed to be compliant with state wage and hour laws governing payroll cards. Similar to the GPR cards we market through our retail
distributors, cardholders may load their wages onto our employer-marketed GPR cards through direct deposit. Although our employer-
marketed GPR cards may not be reloaded through our reload network, they may currently be reloaded at all MoneyGram and Western Union
agent locations.
In addition to GPR cards, we were also a provider of gift cards. Beginning in 2008, we decided to focus primarily on our GPR cards and
we ceased marketing gift cards entirely in August 2010.
Distribution
We have built a distribution and reload network throughout the U.S. comprised of diverse categories of retailers, corporate employers and
our own direct-to-consumer and online marketing programs. As of December 31, 2011, we marketed our GPR cards through more than 600
retail distributors at over 40,000 locations in the U.S. We also offered reload services through approximately 450 retailers at over 130,000
locations in the U.S. Our reload network is designed to provide convenient ways for our cardholders to add more funds to their cards and to
provide our retail distributors with additional opportunities to earn revenue. Retailers typically collect a fee in connection with the reload of
our GPR cards. We do not process reloads for other providers of GPR cards and so none of our revenues are derived from reloads of cards
offered by other prepaid debit card companies. Our reload network is comprised of all of the alternative financial services provider locations
and traditional retail locations that market our GPR cards, as well as all MoneyGram and Western Union agent locations.
Our long-term relationships include leading alternative financial services providers, such as ACE Cash Express ("ACE"), Advance
America, Cash America International, Community Financial Service Center and Check City, leading grocery and convenience stores, such as
H-E-B, Speedway, Murphy Oil and Winn-Dixie, and leading tax preparation service providers, such as Liberty Tax Service. Our largest retail
distributor is ACE with whom we have an exclusive distribution agreement through March 31, 2016. GPR cards distributed through ACE
accounted for approximately 37.9% of our total revenues in 2011. We have also entered into contractual relationships with Interactive
Communications International ("InComm") and Blackhawk Network ("Blackhawk") to sell and reload GPR cards through certain of the
retailers participating in their networks, such as 7-Eleven and Safeway.
In October 2011, we announced that we entered into a Program Services Agreement with PayPal under which we will act as the exclusive
(subject to certain limited exceptions) provider of program management and processing services for PayPal-branded GPR cards in the United
States. We began marketing the PayPal-branded card online in early 2012 and plan on adding retail distribution outlets in the first half of the
year. We anticipate that our relationship with PayPal will assist us in our efforts to expand our distribution footprint in traditional retailers.
We marketed our GPR cards through approximately 1,200 corporate employers as of December 31, 2011. These employers promote
our GPR card to their underbanked employees as an alternative method of wage payment, allowing their employees to receive their wages on
their GPR cards through direct deposit rather than a paper check and allowing the employers to avoid the costs associated with distributing
paper checks. The corporate employers through which we market our GPR
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