ROCKVILLE, Md. - Payment volume for prepaid credit cards is expected to soar 22.4% this year to reach $247.5 billion, according to Packaged Facts, Marketing Daily reports.
That€™s a significant leap from the $202.2 billion in 2011. The report "Prepaid and Gift Cards in the U.S." by Packaged Facts attributes the growth to changes in debit card regulations. David Sprinkle, who publishes Packaged Facts, customers not happy with their banks are turning to prepaid programs.
With distrust of banks gaining ground in lower-income adults, Generation Y and unbanked or underbanked Hispanics, Sprinkle sees much growth opportunity for prepaid cards, especially those that are similar to checking accounts but sans the fees.
Packaged Facts found that prepaid debit cards are beginning to be viewed as an alternative to traditional banking for some population segments as more consumers move to using cash less. Prepaid cards also can find a niche in young adults, who are seeking limited financial services.
7-Eleven is one retailer working to enhance its prepaid debit card selection with the recent announcement of its partnership with NetSpend Holdings€™ PayPal Prepaid MasterCard, which will now be available at 7-Eleven stores. "Because of our current partnership with 7-Eleven, the convenience store company will be the first major retailer to offer the PayPal prepaid card to consumers throughout the U.S.," said Dan Henry, chief executive officer of NetSpend, in a press release.
"We are expanding our current offering of alternative financial services because we see an increased demand for this type of product in our stores," said Jesus Delgado-Jenkins, 7-Eleven's executive vice president for merchandising, marketing and logistics. "Our customers are seeking choice and convenience when it comes to buying a prepaid card. We are selling the PayPal prepaid card because the brand already resonates with many consumers who want more financial flexibility and alternatives to traditional retail banking."
The PayPal Prepaid MasterCard card can be used for online and in-store purchases wherever Debit MasterCard is accepted. The card can also be used to withdraw cash from ATMs while money can be loaded onto the card through direct deposit or at more than 130,000 reload locations through the United States.