Chase’s new Liquid card certainly seems to be making waves.  Chase recently joined a handful of big banks to offer prepaid cards with their Liquid prepaid card.

Chase’s Liquid offers a relatively straightforward fee schedule, which consists mostly of a monthly fee of about $5.

A quick rundown of Liquid’s fees:

$4.95 monthly fee

$5 for money orders or $8 for cashier checks (for making payments such as bills if a plastic payment card isn’t accepted)

Liquid offers the following for free:

Withdrawing or depositing money or checks at Chase ATMs or its branches

Checking your balance at Chase ATMs

Customer Service

Monthly Statements (either paper or online)

The Downside:

Liquid’s cardholders won’t be able to make online bill payments to those who don’t accept debit or credit card payments.  A number of other prepaid cards allow its cardholders to do so without a fee, such as the Walmart Money Card and the Approved Card.

Will Consumers Adopt Liquid prepaid?

One attractive feature about the Liquid prepaid card is that its users are able to deposit checks and money at Chase ATMs and branches without a fee.  For other prepaid cards, it typically costs UP TO $4.95 to put additional money, i.e. funds from a check, into a prepaid card account because they must use a reload pack EACH TIME.  The Liquid prepaid card can provide significant cost-savings for consumers who frequently have checks to deposit or do not have the option to have money directly deposited.  Which leads to the important question of whether there are conveniently located Chase ATMs and branches where their target audience, the underserved, live and work?

Will Chase’s Liquid Change the Underbanked and Unbanked’s View of Banks?

There have been numerous studies again and again about the underserved’s view of big banks, such as the New America Foundation’s March study, “We Don’t Do Banks.”  It seems that given the underserved’s unfavorable view of banks, and the additional negative attention toward big banks and their fees, it’s hard to know whether prepaid cards like Liquid will significantly change minds.

Will Liquid Keep It’s Current Fee Schedule?

Consumers may be attracted to Chase’s newest offering for its low fee, and apparent lack of additional fees apart from the monthly fee.  (The monthly fee, by the way, can be waived if the card is linked to certain Chase checking accounts).  Liquid is currently being offered as a pilot program and expected to roll out in 23 states by the end of the summer.  But will enough consumers sign up for the card?  Will Chase keep to it’s $5 monthly fee for Liquid, or will there be a reassessment of its fees due to a lower than expected adoption?

On the other hand, we have seen prepaid card fees drop, as found in our recent survey of prepaid cards, Prepaid Cards: Loaded with Fees, Weak on Protections.  Liquid prepaid may provide additional incentive for other prepaid card issuers to take another look at their fee schedules again.

And of course, it’s not hard to question the motives behind Liquid, particularly after comments about celebrating when checking accounts have $20 fees.   We certainly hope that Chase’s new prepaid offering aims to provide its customers with a low cost, well-designed product with high utility and does not become a second tier product to steer and shed its current unprofitable checking customers.  Until prepaid cards as a whole have guaranteed federal protections, they simply won’t be on par with debit cards tied to checking accounts.

What do you think about Liquid?