News about consumers’ discontent with banks has been pervasive in the media lately, and a new report published by Mintel, the global leader in market and consumer intelligence, finds that consumers might be willing to act on that dissatisfaction and look for alternatives to their traditional checking accounts.
In Mintel’s recent survey, 19% of respondents overall stated that they would be interested in using prepaid cards to pay bills, rather than a banking account.
More importantly, 25% of households earning more than $100K per year, the more profitable and desirable customers for banks, agreed that they would be interested in using prepaid cards. Their main motivation was to avoid overdraft and/or other types of banking fees.
“This is significant, because if banks were to lose mass affluent customers, it could have a considerable impact on their bottom lines,” states Susan Menke, Ph.D., vice president and behavioral economist at Mintel Comperemedia.
“This means that the traditional category of the ‘underbanked,’ previously characterized by lower-income households and recent immigrants, now has the potential to include individuals with higher incomes who are leaving their banks for less traditional ways of handling their financial transactions.”
What are the most popular ways for prepaid providers to offer incentives to attract this new class of customer? According to Mintel, approximately six in 10 people say they would be interested if a rebate or cashback were offered for using the prepaid card and seven in 10 find purchase discounts at merchants to be an attractive offer.
“There are a number of trends that appear to be springing out of dissatisfaction with the banking system, and the use of prepaid cards could be indicative of a larger trend – that customers are becoming more open to using new or unfamiliar methods for conducting their transactions,” adds Susan Menke.
There is some good news for banks, however. Only 3% of survey respondents say they would prefer to have their salary loaded on a prepaid card rather than direct deposit to a bank, cash or a check.
For more information from Susan Menke, please join us for her upcoming FREE webinar: “Beyond the New Normal: The financial services consumer in today’s economy” Thursday, July 22 at 2 pm CDT. Register here: http://tinyurl.com/24gvf8m
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Source: Mintel Oxygen Reports
Chicago, U.S - 14 July 2010