The prepaid card industry has been growing for the last 20 years and, according to a 2018 report by the Aite Group, this growth trend does not show signs of slowing.
If your credit union does not currently offer a prepaid card program, it is missing the chance to take advantage of a growing industry and enhance its value to current and potential members.
Below are three reasons why prepaid cards are a smart addition to your product offerings.
1. Expand your market
• Reach younger generations with prepaid cards. Research by The Pew Charitable Trusts shows most people who use prepaid cards are under 50 years old.
• Create a gateway to serve the unbanked. Credit unions can offer prepaid cards as a convenient option for people who do not have a traditional account. This can also be a great start to developing relationships within this group.
According to Pew research, more than 40% of people who use prepaid cards don’t have a checking account, but most of them are planning to open a traditional account to help address their savings and loan needs. In this way, prepaid cards can help open your credit union to a more diverse market.
2. Enhance member trust
• Members can use prepaid cards as a safer option than cash.
• Since prepaid cards are not attached to their accounts, your members enjoy the convenience of a debit card without the worry of an account breach if the card is lost or stolen.
3. Grow ongoing profitable relationships
• Prepaid cards are a popular budgeting tool for consumers. By offering these cards to members, your credit union becomes a regular resource for their financial management.
• Reloadable prepaid cards create a regular income for your credit union.
• Connect with members during holidays and personal celebrations with prepaid gift cards.
To get the most out of a prepaid program, choose one with full service, including set up, processing, and marketing support. Industry-leading fraud prevention services and quality customer support are vital to success. Having the right features also makes your prepaid program stand out to members.
Look for these five features:
Once you have decided to offer a prepaid program, don’t wait to get started. The beginning of the holiday season is a great time to start offering gift cards to your members. According to the National Retail Federation, gift cards have been at the top of consumers' holiday lists for over a decade.
Be sure to choose a program that offers a wide-range of designs and credit union branding. Branded gift cards given by members to family, friends, and coworkers are a simple way to promote your credit union.
Are you ready to offer your members the best prepaid program available? Contact the LSC sales department at 1-800-942-7124.
KATHRYN MISNER is the Prepaid Product Manager for LSC, where she oversees the prepaid implementation of new credit unions as well as the technical development and product growth for the prepaid programs.