New Data on Prepaid Card Usage and Underbanked Consumers

Underbanked consumers use cash, money orders and a mix of check cashing, payday loans and other non-traditional arrangements to manage their finances on a day-to-day basis. In the survey, these consumers cited a wide range of benefits as reasons for the high satisfaction rates with reloadable prepaid cards:

• Protection of funds if the card is lost or stolen (84 percent)
• Security because of the ability to carry less cash (77 percent)
• Budget control because of the ability to spend only the amount that is on the card (76 percent)
• Value versus alternatives such as check cashing locations, money orders or credit cards (72 percent)
• Straightforward pricing (81 percent)
• The ability to gain the social (80 percent) and practical (83 percent) benefits of utilizing plastic

The NBPCA-CFSI underbanked reloadable prepaid card survey collected data on the following:

• General satisfaction levels with reloadable prepaid cards
• Usage and frequency of use
• Rankings of benefits and features
• Where and how underbanked consumers become aware of reloadable prepaid debit cards, buy them and reload them
• Understanding and satisfaction levels with respect to pricing and terms and conditions
• Satisfaction with banks and credit cards versus reloadable prepaid cards
• Transcripts of online chats with 40 survey respondents - comprehensive responses about why they chose to purchase a reloadable prepaid card and how they use it today

For survey results and to read excerpts of the online chats please visit the NBPCA website at http://www.nbpca.com.

"Reloadable prepaid cards give consumers with little or no access to credit or traditional financial services the ability to budget, spend and save like a mainstream consumer," said Kirsten Trusko, NBPCA President and Executive Director. "This comprehensive survey shows us in explicit terms the value underbanked consumers put on reloadable prepaid cards, which allow them to spend anywhere the brands are accepted. It is not surprising that they are so quick to recommend the products to their family and friends."

"The survey results are encouraging and complement the growing body of industry research on why reloadable prepaid cards are becoming a reliable option for many underbanked consumers," said Jennifer Tescher, Director of CFSI. "By understanding the underbanked consumers' perspective and needs, and providing products and features that meet those needs, the prepaid card industry is set to be a valuable financial service choice for this important consumer."

The survey was conducted March 2-5, 2009 with 400 adult consumers with incomes less than $30,000 per year who are currently utilizing reloadable prepaid cards and alternative financial services. The margin of error is +/-4.9% at the 95% confidence level.