Dec 09, 2012 Sean Albert
The North Jersey Record recently reported that prepaid cards have continued exponential growth in recent months, largely driven by rising costs of traditional banking accounts for consumers, banks and businesses. The source explained that because the consumer market is shifting toward the Millennial generation, the members of which are still largely low-wage workers or college students, the fees associated with not meeting minimum balances have deterred these individuals from obtaining checking accounts. Further, many Millennials fear credit card accounts because of the possibility of building massive, uninhibited debts that were all-too-common during the years of the Great Recession and directly following. The news provider said that the most recent Federal Reserve study revealed prepaid cards were the fastest-growing payment method outside of cash in the country. With an estimated 60 million unbanked and underbanked individuals in the United States, the Record asserted that it comes as no surprise that more businesses and banks are beginning to offer prepaid cards. This has proven to be a great source of competition for consumers, as rates continue to fall and the perks have risen substantially. These trends in the prepaid card industry are expected to continue on throughout the next several years, as analysts believe that society will continue to move in a cashless direction. Capitalizing on emerging markets
Businesses that offer prepaid cards should consider launching comprehensive initiatives that separate the products from those of competitors, thus attracting more potential customers. With competition tight, fees will need to be at a minimum and perks should be widespread. A strong strategy will bring in more of the underbanked and unbanked households that represent massive opportunities for higher revenues.