Why Some Consumers Are Still Hesitant about Prepaid Cards
by. Konrad Christensen
In my previous post “Why Consumers Choose Prepaid Cards,” I referenced a series of focus group findings with prepaid card consumers from Pew Health Group’s Financial Security Portfolio. The focus groups were put together to better understand and know more about how, and why, consumers are making the decision to add a prepaid card to their wallet.
As prepaid cards have increased in popularity, many financial institutions (FIs) have realized that some of customers are still reluctant to adopt these products. Here are some additional findings Pew’s focus groups uncovered that may help explain consumers’ hesitancy:
• The fees associated with prepaid cards were a drawback for participants. Participants were unhappy with both the number of fees and their cost associated with every aspect of the cards — an initial fee to purchase, subsequent fees for reloading funds, monthly fees, a replacement fee for lost cards, a fee to use ATMs, a fee to call customer service and so on.
- Many participants were unaware of the gaps in prepaid card consumers’ protection and were troubled to learn of them. They embraced the idea of more government and regulatory oversight for these products.
- The lack of itemized balance statements on prepaid cards did not trouble most of the participants as many of them regularly check their balance online or over the telephone.