Chattanooga-based TransCard has sold a part of its business to U.S. Bank for an undisclosed sum in a deal that will add dozens of jobs to both companies.
TransCard plans to use the sale proceeds to expand its prepaid card division in Chattanooga, where it now will focus all its efforts, said Craig Fuller, CEO of TransCard.
The company operates the prepaid card services for more than 65 banks across the country, a footprint of almost 4,200 branches. That's up from one bank customer with two branches when the company was founded in 2010.
TransCard already has hired 15 out of a planned 20 new workers in Chattanooga, while U.S. Bank will add 45 jobs of its own as a result of the deal.
U.S. Bank bought TransCard's fuel card division, which uses technology designed to help truck drivers pay negotiated prices at fuel stops. The technology originally was developed by Chattanooga-based trucking company U.S. Xpress, which is led by Fuller's father, Max Fuller.
"U.S. Bank wanted to be in the business, they thought it was a gap in their offerings, so they made an investment in this business," Fuller said.
U.S. Bank will offer its new service to about 14,000 transportation companies, according to a news release.
Fuller's company already is pushing off in another direction with its newest prepaid solution, which axes per-use fees in favor of a flat rate.
If TransCard's pilot program goes well on what its calling an "unlimited access card," Fuller hopes to pick up customers in the Hispanic community.
Hispanics, who as a group are difficult for banks to reach, may be drawn in by the fee-free structure, he said.
"This is modeled after the prepaid wireless cellular industry," Fuller said. "We're helping banks to add completely new customers and new types of customers."
The new arrangement between U.S. Bank and TransCard uses a "duel wallet" solution, said Ramel Lindsay, group product and program manager for U.S. Bank.
By using one single card or a cardless solution, computers automatically will determine whether a purchase falls under the corporate fuel card account or whether to charge it to a worker's personal prepaid account.
Filling up a big rig with diesel automatically will charge a company account, while a bag of chips will come out of a driver's personal cash.
"At the time of use, it will look and feel just like any standard debit card," Lindsay said.