KBW analyst Sanjay Sakhrani late on Tuesday said in a report, "we view today's announcement as a positive for American Express as the addition of FDIC insurance strengthens the value proposition of the Bluebird product and likely intensifies competition given it was previously a point of differentiation between incumbent players such as Green Dot ( GDOT) and American Express.

Of course, the availability of funds at Walmart stores is another point of differentiation for Bluebird.

"Given the uncertainty around how the new prepaid industry dynamics will play out, we would continue to remain on the sidelines for the incumbent prepaid players," Sakhrani wrote.

Sakhrani rates American Express "outperform," with a $70 price target. Shares of American Express $67.15 on Wednesday.

The analyst rates Green Dot "market perform," with a $12 price target. Green Dot's shares closed Wednesday at $16.53.

-- Written by Philip van Doorn in Jupiter, Fla.

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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.

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