Consumers and Prepaid: Rising Use, Especially by Mobile

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Jan 26, 2015, 03:59 ET

DUBLIN, January 26, 2015 /PRNewswire/ --

Research and Markets (http://www.researchandmarkets.com/research/6zm56g/consumers_and) has announced the addition of the "Consumers and Prepaid: Rising Use, Especially by Mobile" report to their offering.

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New Survey Finds Prepaid Buyers Increasingly Younger And Mobile-Enabled

This new Insight Summary Report from the CustomerMonitor Survey Series reveals that 56% of US adults bought prepaid cards in year preceding the 2014 survey, up from 53% in 2013 and 47% in 2012. Prepaid buyers are increasingly younger: 2 in 3 young adults (aged 18-34) surveyed bought prepaid cards, up from 3 in 5 surveyed in 2013. And they are increasingly mobile enabled, as nearly 2 in 3 smartphone owners, 3 in 4 smartphone and tablet owners, and 9 in 10 adults who have paid for goods and services by mobile phone have bought prepaid cards within the previous year. Today, prepaid cards are often a primary payment vehicle for mobile payments.

Consumers and Prepaid: Rising Use, Especially by Mobile, the latest report from Mercator Advisory Group, presents survey findings based on responses to an online survey of 3,002 U.S. adults conducted in June 2014 as part of the CustomerMonitor Survey Series. The report examines a demographic shift of prepaid card and virtual card buyers and the changing landscape of prepaid card use and recalled loads, highlighting seven categories of prepaid card types. Survey findings cover usage, frequency, distribution channels, the relative importance of feature sets and fees, and brand awareness and current or previous use of 10 major brands of general purpose reloadable (GPR) cards, as well as awareness that these GPR cards can be reloaded or funded through direct deposit.

Prepaid cards are now far more than just gift cards, according to the 2014 survey data, which finds more consumers receiving funds on prepaid cards as incentives, rebates, refunds, and even payroll and money transfers than in previous years. Consumers surveyed indicate they want a prepaid card that offers the conveniences of a bank account, including mobile apps, electronic bill payment, high-quality customer service, alerts, easy access to reloading, and fraud protection as well as ways to gain rewardsall with low setup and maintenance fees.

The two fastest growing segments of prepaid are open-loop gift cards in the form of general purpose nonreloadable gift cards and general purpose reloadable cards. T the purchase demographics are changing, with open loop gift cards are no longer bought more often by lower income earners. Today, higher-income earners (household income $100,000 or more) are more likely to buy GPR cards than in previous years. Mercator Advisory Group expects that as open-loop prepaid cards become more ubiquitous and begin to offer more services once provided only by financial institutions, prepaid cards will be more broadly used by U.S. consumers as a money management tool, especially for their privacy, convenience, and enhanced security.

Even if they have a checking account, many U.S. consumers are attracted to prepaid cards as a money management tool that lets the cardholders control their spending and make electronic payments from funds they set aside, without accruing debt from credit cards or attaching their bank account to the transaction, states Karen Augustine, manager of CustomerMonitor Survey Series at Mercator Advisory Group and the author of the report. Prepaid buyers are more likely to be younger, mobile-enabled, and are more attracted now by enhanced security and mobile banking features.

Highlights of this survey and report include:

Year-over-year trending of prepaid card use by seven categories of prepaid cards (including retailer-specific, general purpose and reloadable cards) and consumers' recollection of cards purchased and monthly load volume
Shifts in the demographics of prepaid card and virtual card users, the ways consumers are using them, and the factors motivating preferences in distribution channels
Importance of rewards to drive prepaid card purchases
Use of online gift card exchanges
Purchase behavior regarding GPR cards, including length of time card is in use, load frequency, and awareness and use of direct deposit to GPR cards
Brand awareness, purchase, timing, and current use of 10 GPR card brands

Companies Mentioned: