The emergence of new prepaid debit cards and improved offerings could lead to increased sales this year, according to an analyst for consultancy firm R.K. Hammer.
Several prepaid card portfolios worth an estimated $6 billion could change hands this year, Robert Hammer, chairman and CEO for the firm, told American Banker. Hammer anticipates that interest generated in the trading and purchasing of the portfolios could lead to sales.
Previously, prepaid cards received consumer scrutiny because of high fees and few incentives. Customers aren’t able to use the pre-loaded cards to build credit and are charged for spending their own money. Card issuers can improve offerings from the payment method by explaining costs to customers, continuing to add incentives like cash back rewards and low-fee cards, widening the target market and offering it as a short term solution, according to Main St.
If prepaid cards accounts trade hands this year and offer consumers with more appealing incentives, the cards could become a popular payment method and retailers might end up seeing a greater volume of prepaid reward cards going through their credit card terminalsBack To Blog