6 Reasons Why Reloadable Cards Are The New Way To Pay
The future of financial payments is here: reloadable cards.
In 2016, 95 percent of consumers said they were satisfied with reloadable prepaid cards, up 22 points from 2015. Open-loop reloadable prepaid cards are the fastest-growing form of electronic payment, with more than 50 percent of people buying a prepaid card for personal use in 2015, compared to 19 percent in 2008. In 2003, prepaid cards accounted for 800 million transactions worth $20 billion. In 2012, the numbers were 9.2 billion and $220 billion, respectively.
In our Financial Predictions For 2017 post, we anticipated the continued rise of reloadable prepaid cards as people begin to rely less and less on traditional banking methods. So far, this forecast has proven correct. But what are the reasons for the rise of prepaid cards? See below for six reasons why reloadable cards are the future of finance:
1. Reloadable Cards Are, Well, Reloadable
This one should be obvious! An open-loop, reloadable prepaid card can be used again and again. Unlike a non-reloadable prepaid card, which acts like a store gift card, reloadable cards can be topped up with additional funds at any time, making it a great option for paying bills, making purchases, and handling your day-to-day financial needs. Putting money onto a prepaid card is easy, because there are so many different options. Some cards are loaded by the prepaid card owner themselves, while others are loaded by an employer, business/merchant, or government agencies.
With the ability to reload almost instantaneously at the click of a button, open-loop prepaid cards are replacing cheques and gift cards as a cheaper, more secure, and faster way to send and issue payments. The flexibility offered by reloadable cards also makes it a superior alternative to direct deposit or wire transfer.
2. Reloadable Cards Are Available To Anyone: Everyone Qualifies!
Qualifying for a bank account or credit card can be difficult–often times financial institutions require minimum monthly balances/spends, credit history, and multiple pieces of identification and forms. With a reloadable prepaid card, all you need are the funds to load onto your card, plus a small activation fee. No barriers means anyone who want a prepaid card can get one.It truly is the card for everyone.
3. Reloadable Cards Are Easy To Use
The convenience of setting up a prepaid account–and easily putting funds on the card–allows millions of people to shop in stores and online. Want to shop almost anywhere in the world? You can with a prepaid card! A prepaid card combines the benefits of debit and credit. Just like your credit card, prepaid cards can be used anywhere that MasterCard or Visa is accepted. That means you can use a prepaid card to make day-to-day purchases at stores, online, and virtually anywhere in the world. Unlike gift cards, open-loop reloadable cards are not limited to one specific store or terminal.
4. Reloadable Cards Offer Innovative Marketing Opportunities
Reloadable cards are a great option for ongoing loyalty, rewards, or incentives programs. Reloadable cards can be promoted and cardholders can be contacted frequently about the program, making them a great marketing tool as they foster an ongoing relationship with clients.
Prepaid cards are great for many types of programs such as rebates, contests, prizes, referrals, and more. For example, mobile rebates can be offered via a virtual prepaid card. With a virtual prepaid card, consumers can redeem their rebates on their smartphones through an online launch window, allowing customers to redeem their rebates with ease and convenience.
Prepaid cards replace cumbersome coupons and offer more security, accountability, and manageability options for businesses. A reloadable card keeps all funds conveniently stored on only one card, rather than multiple gift vouchers or gift cards which can be lost or stolen.
Payments are instant, which will make consumers happy since they can redeem a reward or rebate right away without having to wait for snail mail. This will increase loyalty and engagement, as well as customer referrals.
5. Reloadable Cards Offer Important Tracking And Data
While cheques are an easy way to distribute funds, they cannot be tracked, and do not provide any additional advantages to the giver or recipient. Prepaid users benefit from full visibility, and can view their account balance, transaction history, purchase frequency, and other information instantly via online services, mobile devices, and more. Businesses can identify trends in activity and behaviours, gaining valuable customer insights. Employers can manage/budget funds, get reporting, and improve employer-to-employee relationships.
6. With Reloadable Prepaid Cards, There Is No Such Thing As Debt
There is no credit with a prepaid card, so it’s impossible to create debt. You can’t go over the predetermined limit set on the card—if you try to make a purchase for more than the money on the card, the transaction will be declined. This also means that there are no interest charges, as there are no balances to pay off.
Need more reasons to switch to reloadable cards? Check out Part 2, coming soon!