Prepaid card products are moving beyond lower income and younger consumers and are now spread relatively evenly among most income groups.
A new report finds that about 18% of Americans earning between $35,000 and $75,000 per year are using prepaid products both online and offline.
Javelin Strategy & Research says with multiple loading and reloading mechanisms available today, prepaid cards have longer-term usage and are less disposable in nature, making prepaid programs attractive to financial institutions as a versatile method to increase revenue. Also, the multi-channel nature of the prepaid relationship with middle-to-higher income consumers demonstrates and validates the revenue stream capabilities that prepaid issuance provides. Javelin also found that security is paramount in prepaid card issuance, not only in terms of fraud mitigation but also in the scrutiny that issuers face to comply with anti-money-laundering and “know your customer” initiatives. The new report finds that the processor choice is often overlooked and undervalued by prepaid program managers.
(by Annual Income)
None 22% 17% 15% 3%
Online 9% 14% 21% 9%
Offline 11% 16% 21% 5%
Source: Javelin Strategy & Research