Shifts in prepaid consumer demographics and behavior

by. Konrad Christensen

A recent Mercator Advisory Group survey concluded 53 percent of American consumers purchased prepaid cards in 2013. That’s an increase of six percent from the 47 percent who reported buying them in the 2012 survey.

Specifically, the report titled Prepaid 2013: U.S. Consumers Buying More Prepaid Cards for Own Use, looked at the changing consumer demographics in prepaid card use. It also examined how aware consumers are of reloading, as well as how often they use their prepaid card. Distribution channels, the value of various prepaid card features and brand awareness were also analyzed.

“As new U.S. banking regulations force many banks to raise fees on checking accounts and debit card rules continue to be challenged, many in the banking and payments industry are looking to prepaid cards to gauge their use as a preferred payment tool,” wrote Karen Augustine, manager of Mercator’s CustomerMonitor Survey Series.

The survey confirmed that consumers continue to purchase prepaid cards more often as gifts than for personal use. However, the data also showed an increase in the percentage of prepaid cards purchased for self-use.

The gifts vs. self-use percentages are evening out most noticeably in virtual card offerings. More than 1 in 4 consumers purchased virtual cards, which are sent via mobile device through text or an app. The split between those intended as gifts and for personal use was 50/50.

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