Pricing Strategies and Revenue Opportunities
New Products, Services, and Features

Target Market Strategies

Key Finding from a Recent SYNERGISTICS Research Survey:

In SYNERGISTICS 2011 survey, The Future for Prepaid Cards, it was found that four in ten Internet households had purchased prepaid cards for personal use, having grown from one-fifth in 2008.  To what extent has this increased, decreased, or remained the same?

Highlights of the Study

This study examines the consumer perspective on prepaid cards.  It examines current usage and demand, new services and features, pricing, and marketing strategies.

National Internet Survey – 1,000 consumers age 18 or older.


Key Dates

December 19, 2014 – Charter fee/Intro pricing ends.
December 19, 2014 – Final acceptance of comments on questionnaire.
March 2015 – Project Report available.


Strategic Questions

  • To what extent do consumers purchase prepaid cards for their own use?  What is the share of market between proprietary prepaid cards that are only used at specific retailers and general-purpose prepaid cards that are used anywhere major cards are accepted?  How strong is the demand for general-purpose prepaid cards among nonusers?
  • What are the behavior patterns of prepaid card users in terms of frequency of usage, amount initially obtained on the card, purchase locations, and purposes?  To what extent are general-purpose prepaid cards reloaded with value?  What are the perceived benefits and drawbacks of prepaid cards?
  • Are general-purpose prepaid cards used as a substitute for other financial services – specifically checking accounts or credit cards – among certain segments of the market?   How wide is the potential for doing this?  Are prepaid card products offered by Walmart a factor in this behavior? How will increasing usage of prepaid cards affect usage of credit and debit cards?
  • How widespread is payment of various fees for acquiring and using general-purpose prepaid cards – such as set-up fees, monthly maintenance fees, ATM withdrawal fees, and reloading fees?  Are consumers willing to pay these types of fees?
  • What is the potential of prepaid cards for specialized applications?  What is consumer reaction to payroll cards?  Are other applications – such as insurance benefits, warranty claims, public assistance, and tax refunds – acceptable to consumers?
  • What is the impact of gift cards on the prepaid card market – from the perspective of both purchasing and receiving?   To what extent are gift cards reloaded with value and used on an ongoing basis?
  • What is the profile of the current and potential user segments for prepaid cards in terms of demographic and behavioral characteristics?   Are certain customer segments associated with reasons or purposes of usage – such as budgeting, travel, and checking or credit card substitution?


Research Issues

  • As the newest entrant into the payment card market, prepaid cards are receiving a great deal of attention.  Some of the attention is good; while some can be considered questionable or controversial. Usage of prepaid cards continues to expand as new products are announced on a regular basis.
  • At the same time, prepaid card pricing and features are fodder for legal and regulatory groups as well as others.  Marketing strategies often target the under-banked for prepaid card programs, but affluent consumers are also users of prepaid cards, particularly general-purpose prepaid cards.
  • Marketing prepaid cards is challenging due to the numerous types of cards as well as the variety of purposes for which the cards can be used.  Competition is intense, with major retailers such as Walmart, American Express and large banks as well as others entering the market.  Gift cards also fall under the prepaid card umbrella – further complicating marketing efforts.   How will increasing usage of prepaid cards affect usage of credit and debit cards?  This study examines the consumer perspective on prepaid cards to assist issuers in designing and marketing prepaid card products. [F230]