The bank says it has moved to withdraw from the pre-paid market following its acquisition by Spain's Banco Santander in October.

A review of operations concluded "the pre-paid card business of A&L is not a core part of Santander's UK strategy and will cease operations".

The decision will result in layoffs among the 36 staff working in A&L's pre-paid card unit, although some will be kept on in the short term to oversee the operation's closure.

The bank says it is in consultation with the affected employees and their representatives and some may be offered positions elsewhere within the Santander group.

It is also talking to existing customers to ensure an orderly wind down of the programme and insists no date has yet been set for cards to be cut off. It has refused to say how many pre-paid customers it has.

A&L has been at the forefront of the UK's pre-paid card market, establishing a dedicated unit in December 2007. The Prepaid Card Company Ltd (PCCL), was initially 80% owned by A&L, with the remaining 20% owned by Cupera International Ltd (CIL).

The deal saw the new subsidiary purchase Cupera for £4 million in cash and loan notes and retain the pre-paid card assets and existing employees of the CIL Group.

At this point, A&L had already been one of the UK's leading pre-paid card issuers. In June 2006 it teamed with MoneyCard to launch a Visa card designed for use by commercial clients that previously provided paper payments to customers or employees.

In 2006 the bank launched a pre-paid card for use by commercial clients as an alternative to providing paper payments to customers or employees. This was followed up in 2007 by a pre-paid offering for public sector organisations that can be used to deliver welfare payments.

Last September the bank teamed with payments vendor Indigosolutions to launch a pre-paid foreign currency card with SMS top-ups for holidaymakers.