ATM Survey Suggests Prepaid Card Opportunity for FIs (Feb. 25, 2013)
Feb. 25, 2013
Recent research into the prepaid card-buying habits of ATM users indicates an opportunity for credit unions and banks to capture a portion of the prepaid card market by leveraging the convenience of ATMs. More than 85 percent of credit union members use ATMs and 70 percent of those ATM-using members also buy prepaid cards. However, only 5.6 percent of members actually buy prepaid cards from their credit unions, according to a survey by Better ATM Services, a Mesa, Ariz.-based ATM technology provider, which included responses from approximately 3,000 members from five credit unions located across the United States. The company, which specializes in prepaid card distribution through ATMs, will release a full report on the survey data in coming weeks.
“It is far more convenient to pick up a card from a rack as you’re doing your weekly shopping than it is to make a special trip to your financial institution, get out of your car, go inside the branch, stand in line for the teller, buy your card and come out,” Better ATM Services CEO Todd Nuttall tells Paybefore. “Consumers shifted to a non-financial institution buying practice largely because of convenience.”
However, the survey also indicated that consumers consider the ATM one of the most convenient forms of service, with a majority of them considering ATMs more convenient than a McDonald’s drive-through. The research, Nuttall says, indicates a large opportunity and potential market shift for financial institutions that offer prepaid cards at their ATMs outside of their branch locations. An ATM-dispensed card is made of a thinner material than a typical prepaid card, which allows it to pass through the cash mechanisms of ATMs.
Better ATM Services late last year announced a pilot program with Discover, in which the myGIFT One Card Many Choices Discover Prepaid Card was available at select ATMs. The card enables consumers to shop and dine at several national restaurants and retailers, including Express, Lowe’s, Outback Steakhouse and Macy’s. And, last October, the company announced a nationwide rollout of a program in which Visa prepaid cards are available at certain walk-up and drive-through ATMs.
