A study by TD Bank shows that Millennials like using prepaid cards because prepaid helps cardholders segregate funds and track their spending more closely.
“Millennials have different financial needs than other consumer bases,” said Tami Farrow, senior VP-head of retail deposit payments at TD Bank. “The younger you are, the more the likelihood that you have emerging financial needs that require a different set of tools.”
The shift, in part, is driving more millennials to use prepaid cards. According to the study, 56% of millennials surveyed said the ability to track spending is one of the main benefits of reloadable prepaid cards, as opposed to 46% of people overall.
The results of the study show how prepaid cards are making their way into the mainstream after being pigeonholed as something for unbanked and underbanked people. Prepaid providers and financial institutions should think about how prepaid cards can serve as the start of a broader financial relationship that goes beyond simp0ly transactions.
Mercator Advisory Group’s consumer survey data has shown for years that prepaid has been an important tool for consumers and businesses across the socio-economic spectrum.
Prepaid cards are now far more than just gift cards, according to the 2014 survey data, which finds more consumers receiving funds on prepaid cards as incentives, rebates, refunds, and even payroll and money transfers than in previous years. Consumers surveyed indicate they want a prepaid card that offers the conveniences of a bank account, including mobile apps, electronic bill payment, high-quality customer service, alerts, easy access to reloading, and fraud protection as well as ways to gain rewards—all with low setup and maintenance fees.
Overview by Ben Jackson, Director, Prepaid Advisory Service at Mercator Advisory Group
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