Purchasing channels have evolved over time to offer greater convenience and flexibility on how customers can pay for their purchases. In the past, retailers only had checking as an acceptable form of payment. Now there are a plethora of options at shoppers’ disposal that include prepaid cards and credit cards to name a few. All purchasing channels accepted by the retailer hold different advantages along with it, some providing more advantages than others. Nowadays customers can enjoy their shopping knowing they have their preferred payment method available when checking out. How are consumers shifting their account ownership and card usage?
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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
Consumers Are Shifting Their Account Ownership & Card Usage:
- Ownership of most major accounts continues a decline, indicating a broad account consolidation among consumers.
- Checking accounts have declined from their 2011 high of 95% ownership to a current 86% ownership.
- Savings accounts have declined from their 2011 high of 79% ownership to a current 69% ownership.
- Credit cards have declined from their 2011 high of 77% to a current 64% ownership.
- Mortgage accounts have declined from their 2011 high of 45% to a current 25% ownership.
- Online or full-service brokerage accounts have remained somewhat steady, dipping to 15% ownership (2017) from 17% (2015) and now up to 18% (2020).
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.