The Power of Prepaid: but consumer understanding remains an issue
Some interesting research comes to hand courtesy of MasterCard.
Some interesting research comes to hand courtesy of MasterCard, reports Douglas Blakey.
It commissioned Ipsos Mori to interview 2,400 consumers across six markets (Belgium, Hungary, Netherlands, Poland, Spain & Turkey) including 1,000 prepaid users and 1400 non-prepaid users to understand their current financial behaviour.
The findings, released at MasterCard’s European Prepaid conference in Budapest from where I am penning this, highlighted a glaring lack of consumer understanding about prepaid.
Where the general public begin to understand just what prepaid offers, there is a dramatic increase in greater demand for the product.
Prepaid is one of the simplest banking products to explain yet it seems that the industry across these markets has issues to address to educate consumers about prepaid; awareness of prepaid is averages only 48% across the researched markets.
Report highlights included:
- Across Europe 76% of people manage their finances online; but when it comes to purchasing prepaid products, 51% of prepaid users did so directly from their bank branch, while only 17% did so online through their bank website;
- 77% of people regularly check the balance of their current account – particularly strong in Spain (81%);
- 79% are aware of the credit limits associated with their credit cards;
- Women are more engaged with their finances, with significantly more women keeping track of their finances versus men (83% W vs. 78% M) and more women regularly checking the balance of their current account (79% W vs. 74% M), and
- 70% of parents of children aged 13+ think an advantage of prepaid cards is that it is a good way to teach their children about money management – that rather begs the question why card program managers have failed to launch commercially successful youth-themed prepaid card products, with the exception of a handful of products in Italy and Turkey, and
- 77% of prepaid users surveyed said they were satisfied with the product but currently, active advocacy is relatively limited at 24%, highlighting an opportunity for issuers to encourage prepaid users to share their positive experiences with others.