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Data for this episode of Truth In Data provided by Mercator Advisory Group’s report – The Blurred Lines Between Debit and Prepaid Cards
- The average Debit card is active for over 16 years. The average reloadable Prepaid card is active for less than 1 year.
- There are 476 million Debit cards in circulation. There are 78 million reloadable Prepaid cards in circulation.
- Debit cards see $2,100 billion in transactions. GPR Cards see $108 billion in card loads.
- The average interchange for a Debit card is 0.77%. The average interchange for a general purpose reloadable card is 1.29%.
- Debit and GPR Prepaid card’s features and functionality are almost identical. But prepaid was (and is) built to serve the underbanked.
- Underbanked remains a sizable market: In 2017, 6.5% of US households were unbanked totaling 8.4 million households and 14.1 million adults.
- Reasons cited for going unbanked: not enough $ to keep account: 53% – don’t trust banks: 30% – privacy: 28% – fees: 25% – ID, credit, account problems: 14% -FDIC, 2017
About this report
General purpose reloadable (GPR) prepaid cards and entry-level checking accounts have both evolved to a point where product features and functionality of the two are nearly indistinguishable between the two. A new research report from Mercator Advisory Group titled, The Blurred Lines Between Debit and Prepaid Cardsconsiders the differences between the two products and why providers and users might favor one over the other.
“At first glance, prepaid and debit appear so similar that one could conclude that the payments industry took two separate paths to end up with the same product. Initially prepaid product providers were developing solutions to offer users a bankcard-like product. Now financial institutions are seeing inspiration in GPR card attributes, comments Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group and co-author of the report.