First Data, a global technology and payments processing leader, offered insight into the European prepaid market. Study findings are expected to help banks and retailers build more successful business cases for prepaid products.
Conducted in June and July of 2009, the First Data survey asked consumers to evaluate five prepaid card types (gift, general spending, travel, youth and remittance) in four countries representing various stages of market maturity, Germany, Austria, the UK and Italy.
More than half of consumers who expect to buy a prepaid card within the next 12 months describe themselves as creditworthy consumers with incomes above GBP/EUR40,000 annually.
5% of all respondents see benefit in using a prepaid card to help control spending and manage their money. Marketing messages that focus on the benefits of using prepaid cards for budgeting, and also broad card acceptance, are likely to be very well received by consumers when deciding to purchase prepaid products.
Consumers are more willing to accept charges based on one-off actions such as balance top-up or cash withdrawals than monthly fees or fees charged when making a purchase at the point of sale. 38% of consumers surveyed said they would be willing to pay additional fees in order to personalise a prepaid gift card with a customised colour scheme, picture or message. This represents a significant potential, incremental revenue stream for banks and retailers looking to introduce prepaid card offerings.
Consumer preference for individual distribution channels varied by market. 64% of consumers stated that they would prefer to receive information about prepaid offerings through online media. In addition, 46% of respondents would like to be able to purchase a prepaid gift card online.
Tony Craddock, CEO of Global Prepaid Exchange, said: “The high level of consumer interest in learning more about prepaid products is, in my opinion, one of the key findings of this research. Consumers are increasingly aware of the products and are now evaluating the benefits; a process that should certainly produce improved sales.
“When you couple increased interest with consumers’ predictions of their own behaviour, the clear implication is that the industry is set for near-term, significant growth across the countries investigated.”
Lisa Walker, head of prepaid at First Data’s international business, said: “Our research suggests strongly that retailers and financial institutions could formulate prepaid sales and marketing strategies that are universal or broad in reach, rather than focusing entirely on selling by product, geography or socio-economic groups. Marketing strategies should include online channels as a priority, clearly describe how the product can be used and, importantly, allow consumers to define their own benefits and card usage.”
