Prepaid cards are becoming increasingly popular as a reloadable, convenient way to pay for items online and in stores. These cards have become an attractive option because they can frequently be reloaded with more funds while remaining anonymous and secure. Additionally, they allow people to keep better track of their spending by not exceeding their predetermined budget. With the development of mobile devices, prepaid cards are now even easier to reload or redeem on the go.
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Data for today’s episode is provided by Mercator Advisory Group’s report – North American PaymentsInsights: Prepaid Cards: Shifting Purchase Channels
City Dwellers Are Twice as Likely to Redeem Prepaid Cards on Mobile Device:
- 32% of city dwellers redeemed gift cards on a mobile device, compared to 18% of suburban or rural consumers.
- In-store and online card redemption are almost tied in usage: in a physical store: 64% of consumers in 2020; online: 61% of consumers in 2020.
- 9% of consumers redeemed a card using a mobile app in a physical store in 2020.
- 10% of consumers redeemed a card using a mobile app for an online or in-app purchase in 2020.
- Number of prepaid phone cards purchased in the last year: mean average: 8.7 per consumer; median average: 1 per consumer.
- Number of retailer gift cards purchased in the last year: mean average: 7.5 per consumer; median average: 2 per consumer.
- Number of retailer gaming or music cards purchased in the last year: mean average: 6.3 per consumer; median average: 1 per consumer.
About Report
Mercator Advisory Group’s most recent Insight Summary Report, Prepaid Cards: Shifting Purchase Channels, from the bi-annual North American PaymentsInsights Survey Series reveals continued growth of reloadable cards in the United States. Furthermore, the purchase channels for many types of prepaid cards (closed-loop gift, open-loop gift, open-loop reloadable, gaming, phone and transit) are also shifting, particularly in the area of online purchasing.
Prepaid Cards: Shifting Purchase Channels, the latest Insight Summary Report from Mercator Advisory Group’s Primary Data Service, is based on a sample of 3,001 U.S. adults surveyed in the annual online Payments survey of Mercator’s North American PaymentsInsights Survey Series, conducted in June 2020.
The study highlights consumers’ use and interest in prepaid cards and, in particular, store cards, general purpose (or open-loop) cards and general purpose reloadable cards. The report explores where consumers buy and redeem prepaid cards, whether the cards are purchased for themselves or as gifts, how the cards are used, sources of funds for the cards, and other key aspects of prepaid cards in consumers’ lives.
“The prepaid market is changing with neo and challenger banks, use of reloadable prepaid cards, and more governments and corporations issuing prepaid cards instead of checks for disbursements of all types. That said, the use of gift cards continues to be strong, particularly online,” stated the author of the report, Peter Reville, director of Primary Data Services at Mercator Advisory Group, which includes the North American PaymentsInsights Survey Series.
