4 prepaid market trends and how they relate to your members
The U.S. prepaid market is expected to expand at a 10.5% CAGR by 2028, showing that prepaid cards are a classic that continues to stay on trend (Yahoo! Finance). The popularity and versatility of prepaid cards can provide credit unions with opportunities to expand their reach and build stronger member relationships. A knowledge of market trends, like those below, can be combined with your own member insights to more effectively market your credit union’s prepaid card program.
Trend 1: Rise of cashless transactions and online shopping
According to GM Insights, the 60% global revenue share of the North American prepaid market is partly the result of increasing interest in online shopping, digital forms of payment, and cash alternatives. This highlights the importance of focusing promotional messaging on the online shopping and cashless convenience of your prepaid card offerings, especially among those members who are not taking advantage of other card offerings.
Trend 2: High mobile wallet use among the younger and affluent demographics
More than 50% of high- to mid-income earners and 79% of Gen Z make use of digital wallets (PYMNTS). If you have members who are part of this demographic, or want to reach out to this market, make sure your prepaid card program includes virtual cards and tokenization so these cards can be easily added to a mobile wallet. Apps that make managing cards and funds more convenient are also a way to appeal to this tech savvy demographic. Once you have these features in place, then highlight them via communication channels where your members and this demographic are most active.
Trend 3: High cost of living
Just about everyone is feeling the increasingly high cost of living. This makes the budgeting convenience, low fees, and real-time transaction tracking features often available with prepaid cards particularly attractive to many. To better target your messaging, review member data to see who is struggling with revolving debt and suggest using a prepaid card (either plastic or virtual) to help budget while securely and conveniently making online transactions.
Trend 4: Fraud & security concerns
Prepaid fraud cases have grown 9.5% from 2019 and 2023, making fraud protections important to highlight in marketing messages (Reloadly). First, make sure your card program includes important security features like continuous fraud monitoring, data encryption, AI models, and a liability policy that protects cardholders from fraudulent transactions. Then be sure to communicate to your members, clearly explaining how each feature protects them.
Prepaid cards offer credit unions a valuable opportunity to serve current members and reach new markets. By understanding market trends, you can focus the way you harvest information from internal data and better understand member needs. This in turn can help you pinpoint your current and new target audiences and more effectively market your prepaid cards to them.
As a leading provider of payment processing services, Envisant is here to serve your credit union. To learn how we can help you with your prepaid strategy, please contact us at 1-800-942-7124.
