Alternative Financial Services Customers’ Views on Prepaid Debit Cards
Report Summary
Alternative Financial Services Customers’ Views on Prepaid Debit Cards
Most current prepaid debit cardholders are satisfied with prepaid cards, but satisfaction levels must be maintained for card issuers to remain successful.
Boston, June 30, 2011 – A new report from Aite Group discusses the attitudes of the most frequent users of prepaid debit cards—users of alternative financial services—toward the product, and seeks to help marketers of the cards improve their marketing effectiveness and efficiency. Based on a Q1 2011 Aite Group survey of 500 U.S. consumers of alternative financial services, the report reveals that nearly nine in 10 current prepaid debit cardholders are “extremely” or “very” satisfied with prepaid cards.
The prepaid debit and payroll card industry is a formidable force in U.S. consumer financial services, and Aite Group expects the market for this product to grow to US$104 billion in 2014. The recent recession, ongoing high rate of unemployment, and recent regulatory changes are fueling this growth. Seven in 10 current prepaid cardholders perceive prepaid debit cards to be a better deal than credit cards, and half say that prepaid cards are a better choice for them than checking accounts. While satisfaction of prepaid debit cards is high among users of alternative financial services, marketers of this product must be mindful of cardholder expectations in order to innovate and fuel growth.
“While satisfaction rates among prepaid card users are high, former users’ views of the product aren’t as favorable,” says Ron Shevlin, senior analyst with Aite Group and author of this report. “Prepaid debit card issuers’ marketing efforts should attempt to influence prospective cardholders’ expectations about the product, especially regarding access to credit and credit-building. Long-term use should be incentivized, and alternative offerings associated with the product should be explored.”
This 40-page Impact Report contains 41 figures. Clients of Aite Group's Retail Banking service can download the report.