Survey Turns Conventional Prepaid Card Wisdom on its Head

New survey results indicate that the market for prepaid cards may be much larger than previously thought. According to an article in the Credit Union Times, a survey funded by Market Rates Insight suggests that many middle- and upper-income consumers would be open to using prepaid cards provided by their bank or credit union.

Dan Geller, Market Rates Insight’s executive vice president, considered the survey results so significant that he advised credit unions to “expect prepaid reloadable cards to become the norm in the future.”

“The research clearly shows that baby boomers, who are the largest segment of the U.S. population, are likely to adopt prepaid cards as their main payment method,” he said.

The market for prepaid cards has long been associated with lower-income consumers, often with the assumption that the cards’ primary users would not have access to a deposit-based account, but the study showed that more than 47 percent of existing accountholders considered themselves likely to use a prepaid card offered by their bank or credit union.

Among respondents who considered themselves likely to use a prepaid card, 73.6 percent earn more than $35,000 per year, including 22.1 percent who earn between $66,000 and $100,000 per year and nearly 15 percent who earn more than $100,000 annually.

Consumers even reported being willing to pay an average of $4.21 per month to use the prepaid cards. The study also found that 42.3 percent of those who reported being likely to use prepaid cards are between 47 and 66 years old, further debunking the popular wisdom that prepaid cards are most popular among the young and unbanked.

The results, part of a larger study conducted in April, were released on the heels of last Wednesdsay’s Consumer Financial Protection Bureau (CFPB) hearing on general purpose reloadable (GPR) cards, which was itself a follow-up to the Advance Notice of Proposed Rulemaking (ANPR) issued by the CFPB earlier that day. In general, the survey explored the reported likelihood that consumers would take advantage of services such as credit score reporting, identity theft alerts, mobile deposit, person-to-person payments, personalized coupons and overdraft transfers if they were offered by their financial institution.

 

Questions or Concerns? Contact Matt Halvorson, Anthem Editor: mhalvorson@nwcua.org.

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