Target Corp. is testing the sale of co-branded prepaid cards with American Express Co. in more than 100 stores, the companies confirmed on Friday.
Target began selling the cards in February, said Vanessa Capobianco, a spokeswoman for Amex.
As with other prepaid cards, customers can reload funds and use them at any merchant that accepts Amex-branded cards, said Morgan O'Murray, a spokeswoman for Target.
Analysts and executives in the prepaid card industry said the Minneapolis retailer has had discussions with various payments companies about partnering on a program for several months but has not made any announcement about specific plans.
Target could potentially try to compete with Wal-Mart Stores Inc., which operates one of the biggest prepaid card programs in the country with the prepaid marketer Green Dot Corp. and General Electric Co.'s GE Money Bank.
On Thursday, Green Dot Chief Executive Steve Streit alluded to Target's plans during an earnings conference call.
"There's some things we know [but] we're not supposed to know … so I don't want to talk about those things," Streit said in response to an analyst's question. "I'll let Target make their own announcement."
Streit added that Green Dot would not be working with Target "on those products."
Analysts also said Target may have had discussions with Green Dot's competitor, NetSpend Holdings Inc. NetSpend CEO Dan Henry did not comment in an email on Friday.
O'Murray said Target's trial with Amex, the card's issuer, does not have a projected end date. Amex has been making a bigger push to get into the prepaid card market over the last year.
In April, the New York company announced a new product called Serve, an electronic wallet that allows customers to tie in multiple bank cards as funding sources. Serve users receive a prepaid card linked to the account that can be used to make in-store purchases.
Amex also recently announced it hired former MasterCard Inc. prepaid executive Laura Kelly to lead new product development.
Target already issues its own private-label credit and debit cards to customers. In January it said it hired a consulting firm to look for buyers of its credit card receivables. That effort is still under way, O'Murray said.
