October 19, 2016
Safety and security are contributing to the popularity of prepaid gift cards.
The new Prepaid and Gift Cards in the U.S., 5th Edition from Packaged Facts has revealed that prepaid cards are growing in popularity, especially among low income customers, Millennials and individuals who are unbanked or underbanked.
Giving credit where credit is due, PayPal with its prepaid card is one of the chief industry players responsible for bridging the gap between prepaid cards as a niche commodity and the medium’s growing appeal.
“Increasingly competitive on everything from fees to safety and security to transparency, prepaid card accounts have become real alternatives to traditional bank accounts,” commented David Sprinkle, research director, Packaged Facts.
Packaged Facts found that almost half (48%) of prepaid card users have a PayPal prepaid card, well above major players such as Green Dot, NetSpend, American Express and the Walmart MoneyCard. Moreover, some 28% of them say they use the PayPal “the most,” a far higher rate of response than for other cards.
The results suggest that PayPal has become a significant player among consumers seeking alternatives to traditional banking: PayPal prepaid card holders can link their card to a PayPal account—and must do so in order to access any of its online features. This sets PayPal ahead of its competition because no other prepaid card can be directly linked in the same way. This alone may have pushed PayPal prepaid cards into the top tier of usage performers, given the enormous penetration of PayPal accounts and their outside-the-banking-system utility.