Prepaid Card Growth is Imminent for Households and Businesses

Many people have the misconception that prepaid cards are only used by low income households—a lot of them certainly do— but statistics reveal that there is growth in prepaid card usage across all socioeconomic groups. The FDIC (Federal Deposit Insurance Corp.) recently conducted a survey focusing on unbanked and underbanked households in the U.S.  Here’s what the statistics reveal:


  • Unbanked households dropped to 7.0 % in 2015 (it was 7.7% in 2013).
  • In 2015, 27.1% of unbanked households used prepaid cards compared to underbanked households at 15.4 %.
  • In 2015, 9.8 % of all households in the U.S. used prepaid cards. Two years ago it was at 7.9%.


As you can see, the number of unbanked households decreased in 2015; however, households are using prepaid cards more than ever (across all socioeconomic and demographic groups). It’s no surprise that people are increasingly adopting prepaid cards as a preferred payment method. Similar to a debit/credit card, people use them to perform everyday payment activities:

  • Withdraw cash from an ATM
  • Pay bills and deposit cheques
  • Make purchases online
  • Receive direct deposits
  • Reload cards with funds

However, prepaid cards don’t require a bank account, they do not have overdraft fees, and they do not have the same pitfalls commonly associated with credit cards. You can only use what is loaded on the card; it is a fixed amount, making them safer to use than debit/credit cards. They are also flexible to use, convenient, and perfect for budgeting.

Recently, the CFPB (Consumer Financial Protection Bureau) released new rules and protocols—taking effect in October 2017— to regulate fees and safety for prepaid cards, a change that will positively impact households, employers, and employees. This is an important milestone since 23 million (CNBC) people use prepaid cards regularly. Also, $112 billion is expected to be loaded onto prepaid cards by 2018 (according to the FDIC).

From Households to Businesses

A prepaid card is a multi-faceted tool providing options that meet the needs not only of households, but also of many companies. On a corporate level, prepaid cards provide flexible and cost-effective benefits in areas such as:

Customer Loyalty and Retention

Provide customizable prepaid cards to customers for increased engagement. This includes options such as customer points cards, customer referral incentives, rebates for special promotions, and customer rewards for their loyalty.

Employee Rewards and Incentives

Reward employees with customizable, branded company prepaid cards. This serves as an incentive to motivate and retain employees. Use prepaid cards for providing customer referrals, special rewards, or employee bonuses for meeting certain goals or benchmarks.

Corporate Expenses

Prepaid cards are cost-effective and flexible for corporate expenses. Employers can allocate a specified amount of money on a prepaid card to pay for expenses such as travel, distribution, marketing, etc.  Many companies are even starting to issue them for employee payroll. Prepaid cards are cheaper and faster than printing paper cheques. They are electronically loaded for instant access to funds, saving employees and employers a lot of time and inconvenience.  Expenditures can be easily tracked and monitored via online tools and reports.

Future Trends for Prepaid cards

Consider these compelling facts from Global Market Analysts, Inc. They provide insightful information on prepaid card trends and how they are shaping the future of businesses:

  • By switching to prepaid cards, employers can save up to $223 per employee.
  • Payroll cards can also save employees over $1000 in payroll fees.
  • Nearly 11 million employees will be paid by prepaid cards in 2017. Only 4.8 million will receive paper cheques in 2017.
  • 81 % of executives believe that digital transformation is a competitive advantage.
  • It only takes 6-8 weeks to switch over to a prepaid solution.
  • Eliminating paper cheques will save the federal government close to $1 billion. In the U.S., $50 million is spent annually, recovering lost or stolen checks.

As shown by the facts, prepaid card solutions are growing in popularity in households and in businesses alike. They are flexible for budgeting household expenses, but also versatile enough to build large-scale company prepaid programs. To learn more about prepaid card solutions for company payment solutions, you can visit DCR’s payment solutions information page.

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