Prepaid services are changing the way customers do business. Low-income families, unbanked and underbanked customers, students, those with poor credit and customers that spend much of their time on the road are among those taking advantage of prepaid debit cards and bill services that are free of monthly interest charges.
Customers can load money onto a prepaid card and make purchases, pay bills and even shop online. Experts expect the market to continue to grow considering that, according to MRI data, 53 million (25%) of Americans don’t have bank accounts and 109 million (50%) are underbanked.
Another growing prepaid segment worth watching is gaming cards, which are being promoted heavily by retailers like 7-Eleven. In addition to targeting teens, gaming cards can be promoted with other categories, such as frozen beverages or coffee.
CSD’s 2010 Brand Preference Study polled key decision-makers representing 41 chains about prepaid services. Respondents reported that the top performers in the category were PaySpot (dba epay) and Coinstar, with honorable mentions for Incomm and First Data.
Eighty-eight percent of buyers reported seeing sales presentations from one or two companies in the last 60 days. Meanwhile, 5% saw presentations from three or four companies and 2% from five or more companies. Of the 41 buyers of prepaid cards 5% reported no sales presentations from prepaid card suppliers in the last two months and 98% of buyers reported less than five presentations from the nine companies in the market.
In the past 60 days, buyers saw presentations from PaySpot (dba epay) (41%), Coinstar (39%), Incomm (15%) First Data (10%), IDT (5%), Com Central (5%) and Etime (2%).