The demand for prepaid cards has risen during the current recession, especially with consumers who are credit deprived or have damaged credit histories. Carrying the Discover, MasterCard or Visa logo, these cards can be purchased by consumers to make purchases, pay bills or to get cash from ATMs. Reducing the need to carry large amounts of cash, prepaid cards offer less exposure to bank or credit funds and safeguards against lost or stolen cards. Reloadable prepaid cards offer the ability to budget and track spending, avoiding over spending, overdrafts and high interest charges.
A survey on consumer attitudes about reloadable prepaid cards was conducted by the Network Branded Prepaid Card Association (NBPCA) and indicated they fill an unmet need. The survey included 600 online interviews with consumers who report household income of less than $50,000. “Consumers who deal mainly in cash recognize how reloadable prepaid cards can dramatically improve their lives by replacing the makeshift arrangements they currently use to pay for purchases and manage their finances,” said Marilyn Bochicchio, NBPCA president and executive director. “And, after a modest amount of education, they understand the cards’ security, convenience and control benefitsts.” of respondents had a positive experience with reloadable prepaid cards were aware of reloadable cards felt the cards would be extremely or very useful new advertising campaign, “Everyday Prepaid”, introduced this spring by MasterCard Inc., is designed to raise consumer awareness and demystify reloadable, prepaid cards. Senior Vice President of Global Prepaid Solutions, Laura Kelly said. “We really did try to say, ‘What’s the simple answer and the simple way to describe this product?’
In the past, Visa Inc. has run TV advertisements but currently has not plans to run any prepaid-specific campaigns, according to Hyung Choi, Visa Senior Business Leader for Prepaid Products. “What we’ve done in the past, and we’ve done this for a couple of years now, is to run a very specific general-purpose reloadable spot in several key markets across the U.S., to drive awareness and to drive acquisition of the product,” he said. “We will continue to evaluate the use of this tool to drive further awareness and education of the product in the marketplace, but that’s going to be just one of the components.”
In a recent survey, twenty-one prepaid card company executives expressed frustration with the major payment networks lack of advertising for prepaid cards, when their large budgets are considered. The report said 65% of respondents mentioned “education, awareness or demand cultivation” as one of the biggest challenges facing the prepaid industry. Gwenn Bezard, a research director at Aite and the report’s author said that he expects Visa eventually to follow MasterCard by introducing more prepaid-related commercials and said that the benefits to MasterCard of being first with such a campaign could be limited.
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