By Ben Jackson, Sr. Analyst, Mercator’s Director of Marketing
Prepaid card providers tend to focus on helping consumers spend money, but some have found value in helping them save money. Attaching a savings account to a general purpose reloadable card has led to more loyal customers who hold onto their cards for longer periods of time. Not to be outdone, some retailers are also considering offering prepaid card savings features as a kind of “Christmas club” or layaway plan.
It is a mistake to think that consumers who do not have bank accounts do not or cannot save money. It would also be a mistake to think that prepaid card users would not be able to save any money.
Consumers at all levels are capable of budgeting and savings. The question is whether they leverage those savings as an account or as cash somewhere else.
Savings accounts could be a way for financial services companies to open and develop long-term relationships with customers who have financial needs that go beyond transactional tools.
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