PREPAID CARDS – LOCATION, LOCATION, LOCATION

Prepaid cards are growing in usage and banks need to step up their game as prepaid card outlets in order to compete in the prepaid card market, according to a recent survey by SYNERGISTICS Research entitled, Marketing Prepaid Cards.  Findings from the survey reveal that discount stores such as Walmart or Target are the top mentions, being indicated by more than six in ten general-purpose prepaid card users.  More than four in ten say they typically purchase general-purpose prepaid cards from a supermarket or grocery store.  About three in ten cite convenience stores/gas stations and credit card organizations.  Slightly more than one-quarter say they typically purchase general-purpose prepaid cards at a bank or savings institution.  More than one-fifth indicate purchasing from check-cashing facilities.  One in six report department stores, while one-tenth mention Internet-based companies.

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William H. McCracken, CEO of SYNERGISTICS, stated, “Prepaid cards are being used increasingly for a variety of purposes beyond being gift cards and can be purchased in many different locations.  General-purpose prepaid cards, which can be used wherever major cards are accepted and are offered by many financial institutions, are obtained more widely at a number of locations other than banks or savings institutions.  Discount stores are clearly a top outlet, and it is no secret that Walmart has made great inroads into the prepaid card market.  Consumers are also more likely to be going to grocery stores, convenience stores, and credit card organizations than to banks to obtain general-purpose prepaid cards.  Financial institutions will need either to establish channels of distribution through these types of retail outlets or more aggressively promote that they sell prepaid cards at their branches or via their websites.”

These are among the findings from SYNERGISTICS study, Marketing Prepaid Cards, featuring 1,005 national Internet interviews with consumers age 18 or older.  This study examines the consumer perspective on prepaid cards.  It examines current usage and demand, new services and features, pricing, and marketing strategies.  Results will be presented to clients during a teleconference on May 18, 2015 at 2 p.m. (EST).

DIGITAL CHECKING SPARKS INTEREST

A significant number of consumers express interest in a check-free and digitally oriented checking account, according to a recent survey by SYNERGISTICS Research entitled, Checking Account Acquisition and Retention. Survey respondents who currently have a checking account were read a description of a new checking account for those who do not write checks but use debit cards, ATMs, and online or automated payments and withdrawals. They were informed that the new account may have a monthly fee that could be waived for maintaining balances, making a monthly direct deposit, or paying at least one bill online monthly and asked about their interest in this type of checking account. Overall, more than four in ten checking account holders express interest in this type of digital checking account. One in seven report they would be “very” interested. Those ages 18 to 34 are found to be highly interested in this type of product, with two-thirds of this group expressing interest.

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Genie M. Driskill, COO of SYNERGISTICS, stated, “The consumer checking account is for most consumer households their primary or main financial relationship. Although not the highest balance account relationship held by most, it is typically the most active in terms of transactions and money movement. And very importantly, checking accounts often are the gateway to other financial relationships with customers. In today’s world of digital banking, providers are looking for ways to revitalize this traditional product, particularly for the next generation of customers. The interest expressed by younger consumers in a digital or check-less checking account that shifts activity to electronic or automated channels suggests the direction that checking might take going forward. Issuers should be forging their plans now for a more digitally-oriented checking account for the future.”

These are among the findings from SYNERGISTICS study, Checking Account Acquisition and Retention, featuring 1,001 national Internet interviews with consumers age 18 or older. This study evaluates the checking account relationship in order to assist providers in developing effective acquisition and retention programs. It examines onboarding and cross-selling, packages and value-added services, reward programs, and pricing issues.

BALANCE TRANSFERS: BEST PROSPECTS ARE CURRENT CUSTOMERS

Balance transfer offers have been most effective when targeted at an issuer’s current cardholders, according to a recent survey by SYNERGISTICS Research entitled, Credit Card Marketing Strategies.  One in six cardholders indicate they transferred a balance from one card to another in the past year.  This activity has been widest among 18- to 34-year-olds, narrowing with increasing age.  It also tends to widen with household income.  Most of these respondents, three-fourths, indicate that this balance transfer was in response to a promotion received.  Interestingly, most of these report that the promotion was from a current credit card provider; one-third say that the offer was from a new provider.

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William H. McCracken, CEO of SYNERGISTICS, stated, “Credit card balance transfer offers were once a very prevalent marketing tactic used by card issuers to attract new customers and shift market share.  Activity significantly declined during the recession and credit crunch but is now beginning to revive.  In a twist, our study indicates that much of the balance-transfer activity today involves credit cards already held by consumers rather than promotions for new credit cards.  Issuers are meeting with success by employing balance transfer offers to strengthen relationships with their most creditworthy customers and possibly gain additional income from fees associated with balance transfers.  To a lesser extent, card issuers may be able to attract new customers with balance transfer offers.  Given that recovery in the credit markets will continue, balance transfer programs are likely to become even more widespread.”

These are among the findings from SYNERGISTICS study, Credit Card Marketing Strategies, featuring 1,001 national Internet interviews with consumers age 18 or older.  This study examines consumers’ credit card activity with an emphasis on factors that may impact account acquisition and retention – pricing, rewards, value-added services, and customer service.