Prepaid cards continue to make waves
Nov 09, 2013 Dave King
As the busy holiday shopping season approaches, many consumers have already made plans to begin the extravaganza in the coming weeks. However, the retail and transaction processing landscape has evolved substantially in the past year, as more businesses are beginning to accept electronic payments such as those carried out through mobile devices and prepaid cards.
The Mercator Advisory Group, a consulting firm, recently released its CustomerMonitor Survey Series 2013 Insight Reports, which found the prepaid cards have become even more popular among American consumers this year than they were in 2012. According to the survey, 53 percent of U.S. consumers bought a prepaid card in 2012, which is up from the 47 percent recorded in last year's iteration of the study.
Officials at the firm explained that the majority of prepaid cards are purchased as gifts, but that more consumers are starting to prefer the cards for their own personal use. This should not come as a surprise as more businesses integrate loyalty and customer relationship management programs with prepaid cards.
The survey also found that virtual cards are also becoming more popular, and that some prepaid cards are delivered through text messages or smartphone apps. Roughly 25 percent of the respondents cited purchasing these products in the year leading up to this past June.
"Prepaid buyers are more likely to be younger, mobile-enabled, and buy cards for their own use," Karen Augustine of the group explained. "Prepaid cards are becoming more of a primary payment method and not relegated only for gifts."
Businesses can also leverage prepaid card strategies to penetrate the underbanked and unbanked markets, as these households have been found to prefer these electronic payment capabilities. As Black Friday rapidly approaches, companies would do well to implement new and improved electronic payment processing capabilities in the coming weeks.