Banks Target The 'unbanked' With Prepaid Cards
Prepaid cards offer a new alternative
The survey asked banks about their perceptions and plans for a number of
prepaid card options, including general purpose reloadable cards, payroll cards, student cards and gift cards.
Prepaid gift cards were the most popular of these options with banks, with 58 percent of those surveyed offering or planning to offer these cards. However, general purpose reloadable cards, which are often used as an alternative to checking accounts, were a close second. Fifty-two percent of the banks surveyed said they offer or plan to offer this type of card.
The ability to attract new customers, as well as offer additional products to existing customers, were the main motivations given by banks for offering prepaid cards. In particular, it appears banks may be interested in attracting "unbanked" consumers -- those who currently have no bank account.
Many unbanked customers find traditional accounts too costly or complex to maintain. But the simple nature of prepaid cards may allow banks to extend improved financial privileges to consumers who have previously relied on alternative financial options, such as money orders and check-cashing services.
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