Survey Finds That Purchase of Virtual Prepaid Cards Delivered Digitally Remains Strong
Prepaid cards are still primarily used as gift cards, but they are also often used as a payment tool bought for self-use to help better manage one’s finances, avoid using a bank, and provide a safer way to pay for online shopping or send money to friends or family. Yet, with the rise of mobile payments and person-to-person payments and the lure of new payment forms, Mercator’s latest survey data suggests that fewer U.S. consumers are buying prepaid cards after five years of growth in buying the cards from 2012 to a peak in 2016. However, prepaid card availability is at an all-time high with prepaid options at retailers and for transit, wireless communications, government agencies, and tax refunds along with a host of other varieties. Prepaid cards are no longer just for gifts. Mercator survey data reveals that consumers are buying multiple types of prepaid cards for their own use at retailers and for online services, phone services, and transit as well as buying general purpose cards for themselves and others.
In 2018, we see an evolving shift of prepaid cards to digital or virtual cards delivered electronically, as prepaid buyers are more likely to be young and mobile-enabled. The survey results show that consumers using general purpose reloadable (GPR) cards want a card to offer them the conveniences of a bank account such as mobile apps, bill payment, high-quality customer service, alerts, easy access to reloading, and fraud protection as well as ways to gain rewards—all with low setup and maintenance fees. Many want to avoid using a bank account and consider prepaid safer for online purchases. This report highlights consumer sentiment, attitudes, and self-reported use of prepaid cards, but does not evaluate total transaction volumes of prepaid categories as described in Mercator Advisory Group’s 14th Annual U.S. Open-loop Prepaid Cards Market Forecasts, 2017–2020, released in August 2017, which provides forecasts of estimated loads and opportunities for prepaid cards types, available through our Prepaid Advisory Service. An update of this report is forthcoming.
Mercator Advisory Group’s most recent Insight Summary Report, Consumers and Prepaid: Shifting Toward Digital, highlights opportunities for prepaid products by identifying consumers’ changing demographics and buying patterns with respect to prepaid cards and virtual cards, ways of using the cards and reasons for use, how and where they are redeemed, channels used, likelihood of incremental spend when redeeming gift cards, as well as GPR awareness, use, and reloading frequency along with ratings of important features and brand awareness and use of 13 major GPR card brands.