Thursday, June 28, 2012
Prepaid by the numbers
The Network Branded Prepaid Card Association's inaugural Power of Prepaid congress held June 3 to 6, 2012 in Washington, D.C., provided a snapshot of the current state of prepaid. For example, the Washington-based National Foundation for Credit Counseling shared details about consumer prepaid card behavior. The NFCC said 15 percent of Americans have used prepaid cards in the last 12 months, and that 13 percent of those folks used the cards for everyday expenses, like groceries, while 72 percent said used them as budgeting tools.
Here are some other data points that were presented at the NBPCA's First Annual Congress:
- The Western Union Co. estimated there are at least 2.5 billion consumers worldwide who are considered either unbanked or underbanked.
- The prepaid card industry has only penetrated about 16 percent of the total market for prepaid cards in the United States, according to Western Union.
- MasterCard Worldwide estimated that 20 percent of money spent with a MasterCard-branded prepaid card is transacted online.
- Aite Group reported that 55 percent of prepaid users think banks largely ignore the unbanked and underbanked.
- Aite also found that 60 percent of Americans who close bank accounts in favor of prepaid cards said their actions were cost driven, while 28 percent said convenience was the primary reason.
- NetSpend Holdings Inc. revealed that it lost about $3 million in small-dollar loan amounts it leant to its prepaid cardholders in 2011.
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