The Sosa brothers have returned to run Netspend, taking over the prepaid company that faces a market that's more crowded and digital than when they launched the firm nearly a quarter century ago.
There are differences today; Roy and Bertrand Sosa founded Netspend in 1999 out of their apartment in Austin with $750, and bought it back from its latest owners in May 2023 for $1 billion. The Sosas also run another payments company, Rev Worldwide, that will exist alongside Netspend under a new brand, Ouro.
The Sosas have spent the past five months creating the new brand and building connections between Rev Worldwide and Netspend. The combined company is meant to be an international financial services seller, going up against dozens of competitors looking to build
"We're two Mexican immigrants who started in the prepaid industry and want to come back and reinvent it," said Roy Sosa.
Consuming its own tail, in a good way
The name "Ouro" comes from the Greek work "ouroboros," a symbol with a closed circle and a snake or dragon consuming its own tail. The term was chosen to evoke "continuous reinvention," Sosa said.
"Prepaid has more or less come to a point where it is stale," he said. "There is an opportunity to build something new that covers more markets or products."
Ouro combines Netspend's prepaid card business with Rev Worldwide's debit, cross-border and loyalty products, filling gaps on each side. For example, Netspend does not have a large presence outside of the U.S., nor does it have products designed for higher-end consumers. Conversely, Rev Worldwide does not have a large base in the U.S. or a prepaid business.
There is growing interest from merchant brands, neobanks, traditional banks and others to offer branded payment products to their clients, according to David Shipper, a strategic advisor at Datos Insights.
"The only hurdle I see is that the new company competes in a highly competitive market," Shipper said. "However, the fact that it already has an existing customer base, a broad payment product offering and a global reach will make it a strong competitor."
Netspend will be a brand for prepaid and products designed for financial inclusion and merchant access for underbanked consumers. Rev's X World Wallet will focus on lifestyle, tourism and cross-border payments. There won't be total overlap, but enough of an opportunity for clients to broaden their own business by focusing on groups of customers outside of their core demographics.
"These are very different groups," Sosa said. "We have prepaid consumers on the one hand, and clients of high-end airline loyalty on the other, paying thousands of dollars for tickets. There is a way to bring these businesses together."
Expanding existing partnerships and forging new collaborations will be one way to diversify and cover product gaps, according to Sosa. X World Wallet's direct to consumer program, Walletplus, has marketing partnerships with Etihad Airways, Itau Bank in Brazil and sports leagues such as NASCAR, Major League Baseball, Major League Soccer, the NBA. There are other similar deals in the pipeline.
Netspend's partnerships include a prepaid Mastercard collaboration with Brink's. That partnership can be brought to Rev Worldwide's clients to build a broader range of services, Sosa said.
"Brink's is in 100 countries. People think it's just an armored truck company, but it's very diverse," Sosa said. "It's involved with the movement of money and currency. Some of its clients are central banks, so this brings us to a global scale."
Ouro plans an initial public offering within the next five years. "It won't be done overnight, but we are getting there," Sosa said.
The trend to digital finance has reset competition for prepaid firms, according to Jordan Hirschfield, director of the prepaid advisory service at Javelin Strategy & Research.
"Prepaid can influence loyalty in as many ways as loyalty can influence prepaid. In the case of Ouro, its experience with Netspend highlighted an opportunity to blend that product set to a high-end buyer," Hirschfield said. "In some ways, an international traveler for an upper-end market buyer needs the same ease of use and simplicity as prepaid does to underserved buyers."
How the Sosas got here
Netspend grew quickly during the early 2000s, and went public in 2010; by that time, the Sosas had already launched Rev Worldwide in 2008. The payment processor TSYS acquired Netspend in 2013 for $1.3 billion.
The consolidation was part of an effort by the firms to compete with technology companies like Stripe, PayPal and Square that were cutting into the traditional merchant payment market share of the larger incumbents.
The large combinations have not completely held together. FIS has agreed to sell
Global Payments sold
"While Rev and Netspend have existing product suites with core buyers, those buyers may need additional information to want to participate in the additional services offered," Hirschfield said. "This can be an expensive and time-consuming battle for market share. Any organization working to consolidate must be hyper-focused on the long-term goals and not sacrifice for short-term gains."
