A survey from TD Bank has found that a third of adults between the ages of 18 and 34 have used prepaid cards in the past three years.
Use of prepaid cards was more common among people with higher incomes, the study found. About 40 percent of the people who said they’d used the cards made between $50,000 and $100,000 and 21 percent made more than $100,000. “There is a misperception about how the cards are being used,” said Tami Farrow, a senior vice president with TD Bank, which released a prepaid card last month.
Mercator Advisory Group’s own consumer research has found similar trends. The CustomerMonitor Survey Series found that more than two-thirds of adults between the ages of 18 and 34 said that they has bouts prepaid cards in 2014, which was up significantly from the previous year.
Young people see prepaid both as an alternative and complement to traditional bank accounts. Providers should pay attention to this segment and think about the attributes that can both win these customers — such as offering mobile apps — and keep them for the long term – such as offering the opportunity to move to other financial products.
Overview by Ben Jackson, Director, Prepaid Advisory Service at Mercator Advisory Group
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