Nov 05, 2013 Dave King
Electronic payments have rapidly become some of the most preferred transaction methods in the current consumer landscape, while many businesses have converted their accounts payable and receivable processes into digital formats. Additionally, one of the prevailing products that has experienced massive adoption rates in recent years is the prepaid card, which can be a big help for long term sales.
As the holiday shopping season rapidly approaches, businesses should consider starting a prepaid card strategy to increase customer retention rates and reach emerging markets. Studies indicate that the unbanked and underbanked populations in the United States are expanding rapidly, and currently represent as much as one-fifth of the total number of households.
The Federal Deposit Insurance Corporation released a study in 2011 that also found unbanked and underbanked households tend to favor prepaid cards and other electronic payments when shopping and conducting other transactions. As such, companies can dip into this highly profitable market by offering customers prepaid cards and the opportunity to use electronic payment methods, such as those carried out through mobile devices.
When it comes to the holidays, though, prepaid card strategies can be especially advantageous, as they can give customers a greater reason to frequent the business even after the shopping season ends. Research has concluded that the cost of attracting a new customer is far higher than retaining an existing one, and that the latter category will generally be more financially beneficial than the former on a case-by-case basis.
By creating a prepaid card strategy that incorporates loyalty programs and streamlines the overall experience for the customer, businesses will be increasing the chances of obtaining repeat customers in the coming year. There is no better time than now to get the ball rolling on these projects, as the heaviest foot traffic will begin in the coming weeks.