Community Service with the Personal Touch

September 23, 2014
/   Insights

Question: Community branch, personal service, mobile banking—which is the odd one out? Answer: None. Otherwise, the industry is in trouble. For some time now, there have been discussions about the future of community banks...

Cause and Effect: If you build it, will they come?

July 23, 2014
/   Spotlight

Many financial institutions assume that digital banking is lucrative because the most valuable customers happen to bank online. While there is certainly a correlation between online bankers and higher profitability, quantitative evidence suggests that...

Fast Facts: Student Loans

January 22, 2013
/   Insights

The Financial Services Roundtable recently released another iteration of its Fast Facts, reliable, bullet-point research about issues facing the financial services industry. Topics span TARP, Dodd-Frank, insurance, lending, retirement savings and more.  Below are some updated Fast...

Intuit 2020 Report: The Future of Financial Services

April 11, 2011
/   Insights

Today, Intuit released the latest edition of the Intuit 2020 report, Intuit 2020 Report: The Future of Financial Services, which identifies and examines four key trend areas that will  transform the financial services industry...

Small Business: Perception vs. Reality

November 21, 2012
/   Insights

In the most recent election cycle, like most others before it, the one sector of the economy that got the most attention was small business.  This is the future, we were told by every...

The Top 10 Trends in the Digital Banking Industry

December 18, 2013
/   Spotlight

2014 is rapidly approaching and as the year wraps, the Digital Insight team has pulled together the top 10 trends in the digital banking industry based on data and trends from studying financial institutions....

Mobile Banking Engagement: Data from Digital Insight

June 24, 2013
/   Spotlight

Intuit Financial Services has been conducting a comprehensive and ongoing study of financial institution customers. From these studies, the company has been able to provide a deeper view of banking customer behavior across several...

Fast Facts: Financial Executive Economic Outlook Report

February 1, 2013
/   Insights

The Financial Services Roundtable recently released another iteration of it’s Fast Facts, reliable, bullet-point research about issues facing the financial services industry. This series is the The Financial Services Roundtable’s first bi-annual Financial Executive Economic Outlook...

The Financial Services Roundtable recently released another iteration of its Fast Facts, reliable, bullet-point research about issues facing the financial services industry. Topics span TARP, Dodd-Frank, insurance, lending, retirement savings and more. This iteration focuses on the ins-and-outs of prepaid cards: a flexible financial alternative for underbanked individuals.

A flexible financial alternative for underbanked individuals, prepaid cards are among the fastest growing payment products in the United States, proving to save money both for users and the American taxpayer.

FACT: Prepaid cards provide an effective alternative for millions of consumers who don’t have access to a checking account and, increasingly, a convenient additional financial tool for many consumers who have checking accounts. Almost $1 trillion in payments from employers and the government are made to 80 million adults in the U.S. who are financially underserved. For many, replacing paper checks with direct deposits is not an option.

FACT: Prepaid cards allow the 11 million households in the U.S. without bank accounts to be part of the mainstream American economy, make electronic payments, and receive electronic fund transfers.

FACT: A 2012 study finds that 73% of prepaid card holders are highly satisfied with the product, 61% prefer prepaid cards to credit cards, and only 37% prefer to use cash.

FACT: Prepaid cards are inexpensive to use. According to a 2011 Bretton Woods study, prepaid cards only cost users an average of $185 per year, while it costs on average $273 per year to use a basic checking account and $256 per year to use a check casher.

FACT: A 2012 Pew study found that prepaid cards are less expensive than checking accounts for financially inexperienced consumers.

FACT: Prepaid cards are widely accepted. Cards from large brands, such as Visa and MasterCard, can be used everywhere debit cards are accepted and at millions of ATMs worldwide.

FACT: Prepaid cards are safe by allowing consumers to make purchases and pay bills without carrying large amounts of cash. In addition, prepaid cards frequently provide zero liability to the cardholder if it is lost or stolen.

FACT: Nearly all prepaid cards in the U.S. are issued by banks, as a 2012 survey found 47 percent of banking customers are more likely to use prepaid cards if offered by their financial institution.

FACT: Prepaid are useful for all kinds of people in a variety of contexts. For example, they facilitate inclusion and build financial literacy skills by helping families limit spending and stay on a budget.

FACT: Prepaid cards are used by people of all income levels. Of those who are likely to use prepaid cards, 26.4% earn less than $35,000 per year, 36.7% earn between $35,000 and $65,000 per year, 22.1% earn between $66,000 and $100,000 per year, and 14.8% earn over $100,000 per year.

FACT:  Governments are turning to electronic payments because they are efficient and cost effective. Prepaid cards allow those without bank accounts, including 4 million Social Security recipients, to still receive their payments in an easy, electronic way.

FACT: Prepaid cards save taxpayer dollars. While it costs the federal government $1.03 to issue each paycheck, it only costs 10.5 cents to issue an electronic payment. The U.S. Treasury estimates it will save more than $1 billion over 10 years by switching from a check-based system to electronic payments with a prepaid card option.

FACT: Prepaid cards save paper. The U.S. Treasury estimates it will save 12 million pounds of paper over 5 years from making Social Security payments electronically.

FACT: A spring 2012 study finds that 95% of recipients are satisfied with the Treasury’s electronic benefit payment system and 93% would recommend it to friends and family.

You can view all previous Fast Facts at www.RoundtableResearch.org. Copyright © 2013 The Financial Services Roundtable, All rights reserved.

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James W. Gabberty

Gabberty is a professor of information systems at Pace University in New York City. An alumnus of the Massachusetts Institute of Technology and New York University Polytechnic Institute, he has served as an expert witness in telecommunication and information security at the federal and state levels and holds numerous certifications from SANS & ISACA.

Marisa Mann

Marisa Mann brings over 15 years of experience in consulting and financial services industries to the Solstice team, working on large scale enterprise initiatives across many technologies, including specializing in the digital space – Internet and mobile. Mann is passionate about mobile and the endless possibilities for the enterprise, delivering business value through strong brand recognition and driving to excellence in the consumer experience. Prior to Solstice, Mann worked at JP Morgan Chase, Diamond Management and Technology Consultants, Washington Mutual, Inc, and Accenture.

Zachary Ehrlich

25-year-old writer, and as a native San Franciscan, I am unreasonably loyal to Bank of America, if only for their superhero-like origin story, involving the 1906 earthquake and Italian fruit vendors.

Brad Strothkamp

http://www.forrester.com/rb/analyst/brad_strothkamp