Expert believes prepaid cards a threat to traditional banking

The prepaid card industry has expanded rapidly in recent years, as many businesses have rolled out products to ride the wave of alternative finance popularity. Financial institutions are now being forced to adjust their offerings to meet the demands of the new generation of consumers, and some experts even believe that alternative financial services might even replace traditional options. Fox Business recently interviewed Neil Weinberg, the editor-in-chief of American Banker, regarding the popularity of prepaid cards. Weinberg purported that this form of plastic represents a major threat to debit and credit cards, as well as traditional banking services at large, mostly because of their flexibility and competitively low fees. The editor told Fox News that the leading demographic alternative finance is reaching is the underbanked population, as well as middle class families who do not want to deal with their banks any longer. Because most of the major prepaid card options have much lower annual rates and no overdraft fees when compared to the traditional cards, they are becoming a much more attractive option. Businesses will have to consider offering these alternative financial products in the coming years, as more reports continue to indicate a massive move in preference toward nontraditional banking and payment processing.