Study Finds Prepaid Cards Could Replace Debit Cards
According to a study conducted by Market Rates Insight, nearly half of consumers surveyed are likely to adopt prepaid reloadable cards. The findings of the study indicate that 47% of consumers are likely to use prepaid reloadable cards for routine purchases, making prepaid reloadable cards one of the emerging lifestyle financial products that consumers are seeking from financial institutions.
The study results from more than 1,500 bank customers and credit union members nationwide, shows that 47.1% of consumers would adopt prepaid reloadable cards if they were offered by financial institutions, and that they would be willing to pay, on average, $4.21 per month for the use of prepaid cards. This is just one of the newly identified lifestyle financial services that offer a new potential revenue source for banks and credit unions.
The study shows that among consumers who are likely to use prepaid cards, 36.7% earn between $35,000 and $65,000 per year; 22.1% earn between $66,000 and $100,000 a year; and 14.8% earn over $100,000 per year. The study also found that 42.3% of consumers likely to use prepaid cards are baby boomers ranging in age between 47 and 66 years old.
"Our research shows that, contrary to common belief, prepaid cards are likely to be used by consumers at higher than average income level. In fact, our findings were recently validated by rollout of a prepaid card by one of the largest banks in the country," said Dan Geller, Ph.D. Executive Vice President at Market Rates Insight. "The newly introduced prepaid card carries a monthly fee of $4.95, which, as our study indicates, did not encounter consumer resistance, unlike the recent backlash to proposed debit-card fees."
The prepaid card findings are part of a comprehensive consumer research study which found that 67.1% of consumers are likely to use services such as credit score reporting services, identity theft alert services, mobile deposit services, person-to-person payment services, personalized couponing services, overdraft transfer services, and prepaid reloadable card services, if those services were offered by their financial institution.
The common denominator between these services is that they can all be categorized as lifestyle financial services, financially-oriented services that have emerged over the last two decades due to advancement in technology and changes in personal lifestyle. Today, these services are becoming the norm because they support the emerging lifestyle needs of consumers such as mobility, time efficiency, digital identity protection, real-time alerts etc.
The Integrated Study on Service Fees from Market Rates Insight is available as a comprehensive report assessing all seven lifestyle financial services. Individual reports also are available for credit score services, identify theft protection, personalized couponing, prepaid reloadable cards, overdraft protection, personal money transfer, and mobile remote deposit capture. Each study features consumer research on preferences and perceived value, as well as demographic segmentation.
