Serving Unbanked Consumers in Transit with Prepaid Cards

“Unbanked and underbanked households make up more than 20 percent of the U.S. population, so this is an important report for financial institutions and transit agencies to gain a better understanding of the various methods available for providing and re-loading fare media to this significant market segment,” said Randy Vanderhoof, executive director of the Smart Card Alliance.

The white paper answers the following questions:

• What is the size of the unbanked market and what tools are available for transit agencies to determine the number of unbanked and underbanked consumers in their geographic region?
• How do transit agencies serve the unbanked rider now? What have transit agencies learned from implementing retail sales networks to support transit product sale and reload for unbanked riders?
• What are network-branded prepaid cards and how are programs implemented? How do prepaid cards differ from credit and debit cards?
• What approaches could a transit agency use to work with the financial industry to offer prepaid cards to unbanked riders?

The white paper includes case study data from the San Francisco Bay Area TransLink® and the Washington Metropolitan Area Transit Authority SmarTrip® programs and details of the business structure and economics of prepaid card programs.

Participants involved in the development of this report included: ACS, MasterCard Worldwide; Metro/SORTA; Metropolitan Transportation Commission (MTC); MTA New York City Transit; Power2Process; Ready Credit Corporation; Washington Metropolitan Area Transit Authority (WMATA).