PaymentsJournal
No Result
View All Result
SIGN UP
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
PaymentsJournal
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
No Result
View All Result
PaymentsJournal
No Result
View All Result

With New Fees Big Banks Force Customers Toward Cash and Prepaid

By Ben Jackson
October 5, 2011
in Mercator Insights
0
0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn
AI, Machine Learning or Software Savant, Forget the Name and Get Started! - PaymentsJournal

The media has given a lot of attention toBank of America’s announcement that it will begin chargingcustomers $5 a month if they use their debit cards to makepurchases. Bank of America is not alone in this, as other nationaland large regional banks have looked to impose similar fees. On theflip side, these banks say that customers can continue using theircards in bank-owned ATMs for free.

This has two effects for the low-balance account-holder. First, itmakes cash seem a lot more attractive, and second it makes prepaidcards seem like a better option for financial services.

On one hand, despite the outcry over the new fees, many customerswill be reluctant to switch banks and inertia will cause them topay the fees without too much thought. Others will becomecash-oriented, making more trips to the ATM. This may benefitmerchants who regard cash as the lowest cost payment vehicle. Muchwill depend on whether or not general merchants will follow theexample of gas stations and begin offering discounts for cashpurchases. If so, these two factors in combination may cause theuse of cash to climb.

For those customers who prefer to use a card for transactions andthose for whom other fees and costs make bank accounts costly, theymay find a switch to a prepaid card is their best option. Mostprepaid cards charge fees that are $5 or less, and many fees arewaived when the customer signs up for direct deposit. In comparisonwith a checking account that charges $5 for a debit card, theprepaid industry has a stronger case that its products serve as alow-cost option for receiving financial services.

0
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn
Tags: DebitMerchant AcquiringMobile PaymentsPrepaidSelf Service and ConvenienceSocial Media

    Get the Latest News and Insights Delivered Daily

    Subscribe to the PaymentsJournal Newsletter for exclusive insight and data from Javelin Strategy & Research analysts and industry professionals.

    Must Reads

    commercial card, Allpay ClearBank Prepaid Payments, wealth transfer

    How Banks Can Capture the Wealth Transfer from Boomers to Gen Z

    June 20, 2025
    embedded lending

    Embedded Lending as a Growth Strategy for ISVs—How to Maximize Revenue Potential

    June 18, 2025
    merchant ai

    Merchants Find More Use Cases for AI Amid Risks

    June 17, 2025
    prepaid payroll

    Taking the Check Out of Paycheck: The Role of Prepaid in Payroll

    June 16, 2025
    Banking-as-a-service BaaS

    Remodeling Main Street: How Community Banks Can Leverage the Banking-as-a-Service Paradigm

    June 12, 2025
    How Employee Performance Enhances the Customer Experience

    Three Strategies to Maximize Loyalty in the AI-Driven World 

    June 11, 2025
    PFM tools

    How FIs Are Cutting Through Subscription Clutter with PFM Tools

    June 10, 2025
    child identity theft

    Stranger Danger: Protecting Your Children from Identity Theft

    June 9, 2025

    Linkedin-in X-twitter
    • Commercial
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Digital Banking
    • Commercial
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Digital Banking
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter

    ©2024 PaymentsJournal.com |  Terms of Use | Privacy Policy

    • Commercial Payments
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    No Result
    View All Result