EnaComm, a fintech empowering digital backend banking solutions, has partnered with credit union service organization Payment Systems for Credit Unions (PSCU) to support credit union prepaid card offerings. This move allows credit unions to keep pace with the expanding use of open-loop prepaid cards, spurred by COVIDand expected to grow at sustainable rates of 3.3% CAGR from 20-212-25 according to the Mercator 2022 Prepaid Outlook.
The arrangement allows credit unions to have a consistent offer in the prepaid space and adapt to their consumer preferences, according to the article in American Banker:
Although the prepaid offering is meant to be customizable, it’s also meant to provide consistency across the channels consumers use to manage their accounts, according to Chris Dell, vice president of business development for EnaComm.
The tool “is not something that’s fragmented where we’ve had the web portal for a decade and now we’re just rolling out a mobile app,” Dell said. “It’s something that was built from the ground up to cooperate together and to do so in a way that could be seamless, whether it’s between your computer or your phone.”
The relationship also encourages broader use of credit union services by targeting next generation users who can take advantage of pre-paid services as an entry point into the personal finance ecosystem.
Outside of the applications for current credit union members, prepaid card programs hold similar benefits for younger consumers or those without credit seeking to understand budgetary management and personal finance.
“All these products out there, they’re marketing them as debit cards but behind the scenes, there is a prepaid platform and this whole ability for the parent to teach financial literacy to the youth and [have them] grow up through a card product is huge,” said Courtney Haan, strategic product manager for PSCU.
Capturing emerging customers can provide frictionless opportunities to add new customers for credit unions and give support to the current customers by establishing guardrails on the experience before gaining independence. For credit unions, the solution provides an advantageous entry point to compete in the market versus larger institutions in a marketplace that has only about 20% penetration of the 53.5 million potential children, as highlighted in Mercator’s recent viewpoint.
Overview by Jordan Hirschfield, Director of Research at Mercator Advisory Group