Times Of Change

Along the popularity of stored value cards comes another form “Pre-paid debit card” in which marketer’s think that it would click to an estimate of 70% to 80% of people in the U.S who lack basic banking accounts. These cards look like credit cards but would act as a debit card that will be able to substitute cash for everyday expenses such as purchasing gasoline, restaurant tabs and groceries.

Advocates of these pre-paid cards say that it is safer and more convenient for consumers than carrying cash around. It is accessible to those who don’t have or has a poor credit history.

Due to the estimated $117 billion purchases of the pre-paid debit card. Regulators and law enforcement officials have raised concerns about its potential for abuse. The reloadable pre-paid debit cards are issued by banks but sold by companies through ordinary retail outlets.

As of today, marketers aim for this product to produce financial literacy among unbanked consumers who live at or are below poverty line that tends to fall outside the radar of bank marketing programs. These pre-paid debit cards are cost efficient to the banking industry in terms of reducing the number of paper checks. Pre-paid debit cards are a way for banks to embark on building customer history with people they never had establish contact with.