What Are Millennials Looking For With Payments Cards?
A 2016 study called “ The New Financial Reality: The Rise of Non-Traditional Wage Management” asked more than 1,000 adults, ages 18 to 65, who had been employed in the previous six months, to list their attitudes and perceptions around wage payment options. One of the most important findings in the study was millennials’ overall positive view of prepaid payroll cards, with 64 percent of millennial respondents saying payroll cards should be offered as an option by employers and 40 percent saying they feel a company cares about its workers when it offers more payment options.
Millennials are the largest demographic in the U.S. workforce. Thirty-seven percent of all millennials feel it would be valuable to have their pay loaded on a paycard each payday, which amounts to over 29 million millennials in the U.S..
So what is it about prepaid payroll cards that is so appealing to millennials?
More than 5 million U.S. millennials don’t have a chequing account, and one third say payroll cards would be a valuable way to receive wages. 48 percent of millennials who don’t have a chequing account say the reason is that they do not trust banks. 45 percent of millennials who use prepaid cards do so to avoid overdraft fees, 50 percent use them to avoid debt, and 46 percent to avoid cheque cashing fees.
In addition to “underbanked” adults, teens also need a way to complete online purchases. Apps like iTunes, Spotify, and PayPal require a linked credit or debit card in order to make purchases or keep an active account. A prepaid card allows teens to put their money towards purchases without borrowing a parent’s credit card.
In older generations, people would often work 30 to 40 years at a single company and then retire. Millennials, however, are far more likely to jump from job to job as they look for companies that align with their values and goals, and may only work at some jobs for a few years. For these cardholders, the ability to take a payroll card with them to the next job is a must.
Security is an extremely important factor for millennials who are living paycheque-to-paycheque and spend a large portion of their income on essentials like food and bills. With wages playing an important day-to-day role in the lives of many millennials, paycards offer a safe, secure, and fraud-free way to handle their finances.
Millennials are among the most educated about payment options, but they also expect education and support from their card providers. While previous generations generally prefer to speak to a person (often face-to-face), millennials want communication to be available in different formats, such as 24/7 online support, social media customer support, chat, email, etc. so they can choose the option that suits them best.
Have questions or looking to learn more about prepaid cards? Feel free to contact us by visiting our contact page. DCR offers years of experience and expertise in prepaid card programs—from the launching stage all the way through fulfillment and program management.