Study: Prepaid Satisfaction High but Image Problem Persists (Mar. 5, 2015)
Sixty percent of U.S. consumers have used a prepaid card in the last 12 months, with gift cards leading usage (44 percent), followed by rewards/incentives (15 percent) and prepaid debit (12 percent), according to GfK research presented last week at All Payments Expo. With plenty of room to further penetrate the market—40 percent of respondents had not used a prepaid card—survey results around willingness (or not) to recommend prepaid to a friend, suggest the industry may be suffering from a lingering image problem, according to study author and executive vice president of GfK Tom Neri.
“When we talk about prepaid debit, some consumers have a negative association with it—partially because of fees and partially because they feel they’re using the products out of necessity,” Neri tells Paybefore. Although some prepaid users are strong advocates and fees have been trending downward for several years, a highly fragmented prepaid market has work to do to change its image across the wider consumer population, he suggests.
GfK surveyed 1,000 online consumers representative of the U.S. population from May 30-June 2, 2014; and again February 13-17, 2015. After narrowing the field to 609 prepaid users, GfK found that 65 percent or more consumers across income brackets were satisfied with prepaid cards. Yet, when asked if they’d recommend prepaid to a friend, the responses were more mixed. Of prepaid users—across card types—25.4 percent were likely or very likely to recommend prepaid, but detractors (those who selected 1-6 out of 10 on the Net Promoter scale) totaled 47.7 percent, dropping the overall Net Promoter Score to -22.3 percent.
Neri says targeting millennials may be a good strategy for prepaid companies because they can appeal to millennials’ budget-conscious mindset, and millennials aren’t as likely to have preconceived ideas about prepaid. If the cards offer a robust mobile experience, all the better.
“The millennials and digital natives have come to expect an integrated, personalized and mobile shopping experience,” he explains. “The question is: Who’s going to do the heavy lifting on the marketing?”
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