Prepaid products are a convenient and flexible option for those looking to manage their expenses. Prepaid products are a great way to stay within your budget and avoid overspending by loading a certain amount of money upfront. Not just limited to phone cards, prepaid products include gift cards, transit cards, and even prepaid debit cards. These options make it easy to give a gift, commute to work or shop online without using a traditional credit or debit card. Additionally, no credit check is usually required to get prepaid products, making them accessible to people with limited or bad credit histories.
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Data for today’s episode courtesy of a report from Javelin Strategy & Research: External Regulatory Forces Affect the Prepaid Market
How has the current economic situation affected your decision to purchase a prepaid card product?
- 10% – less likely to buy a prepaid card product
- 11% are less likely to buy a prepaid card product
- 54% – less likely to purchase a prepaid card product
- 16% – more likely to purchase prepaid card products
- 9% – more likely to purchase prepaid card products
About the report
In an uncertain economic environment, the payments industry needs to respond to micro and macro issues. Large-scale policy changes aimed at combating inflation, tackling unemployment, and addressing other macro conditions will be the main drivers of changes in the prepayment market. Secondary drivers include broad and local efforts to curb money laundering and fraud, and an increase in savings products such as flexible spending accounts (FSAs) and health savings accounts (HSAs).
Indirectly, different levels of regulation aimed at transforming other payments verticals, primarily credit, will have lasting changes in the prepaid market. Continuing efforts to limit interchange fees could have a secondary impact on loyalty programs, which drive a lot of prepaid business as a secondary way to take advantage of rewards. Additionally, the continued potential for regulating cryptocurrencies could benefit prepaid mechanisms that look to easily convert cryptocurrencies to fiat at the point of sale.