Mercator Advisory Group’s most recent Insight Summary Report from the CustomerMonitor Survey Series reveals that 56% of U.S. adults bought prepaid cards in year preceding the 2014 survey, up from 53% in 2013 and 47% in 2012. Prepaid buyers are increasingly younger: 2 in 3 young adults (aged 18–34) surveyed bought prepaid cards, up from 3 in 5 surveyed in 2013. And they are increasingly mobile enabled, as nearly 2 in 3 smartphone owners, 3 in 4 smartphone and tablet owners, and 9 in 10 adults who have paid for goods and services by mobile phone have bought prepaid cards within the previous year. Today, prepaid cards are often a primary payment vehicle for mobile payments. Consumers and Prepaid: Rising Use, Especially by Mobile, the latest report from Mercator Advisory Group, presents survey findings based on responses to an online survey of 3,002 U.S. adults conducted in June 2014 as part of the CustomerMonitor Survey Series. The report examines a demographic shift of prepaid card and virtual card buyers and the changing landscape of prepaid card use and recalled loads, highlighting seven categories of prepaid card types. Survey findings cover usage, frequency, distribution channels, the relative importance of feature sets and fees, and brand awareness and current or previous use of 10 major brands of general purpose reloadable (GPR) cards, as well as awareness that these GPR cards can be reloaded or funded through direct deposit.

1. Online Banking: A Shift to Mobile Platforms
CustomerMonitor Survey Series 2013
June 2014

2. 2014 Mercator Advisory Group
Mercator Advisory Group’s most recent Insight Summary Report from the
CustomerMonitor Survey Series reveals that 56% of U.S. adults bought prepaid
cards in year preceding the 2014 survey, up from 53% in 2013 and 47% in 2012.
Prepaid buyers are increasingly younger: 2 in 3 young adults (aged 18–34) surveyed
bought prepaid cards, up from 3 in 5 surveyed in 2013. And they are increasingly
mobile enabled, as nearly 2 in 3 smartphone owners, 3 in 4 smartphone and tablet
owners, and 9 in 10 adults who have paid for goods and services by mobile phone
have bought prepaid cards within the previous year. Today, prepaid cards are often a
primary payment vehicle for mobile payments.
Consumers and Prepaid: Rising Use, Especially by Mobile, the latest report from
Mercator Advisory Group, presents survey findings based on responses to an online
survey of 3,002 U.S. adults conducted in June 2014 as part of the CustomerMonitor
Survey Series. The report examines a demographic shift of prepaid card and virtual
card buyers and the changing landscape of prepaid card use and recalled loads,
highlighting seven categories of prepaid card types. Survey findings cover usage,
frequency, distribution channels, the relative importance of feature sets and fees, and
brand awareness and current or previous use of 10 major brands of general purpose
reloadable (GPR) cards, as well as awareness that these GPR cards can be
reloaded or funded through direct deposit.
Consumers and Prepaid: Rising Use, Especially by
Mobile

3. 2014 Mercator Advisory Group
Prepaid cards are now far more than just gift cards, according to the 2014 survey
data, which finds more consumers receiving funds on prepaid cards as incentives,
rebates, refunds, and even payroll and money transfers than in previous years.
Consumers surveyed indicate they want a prepaid card that offers the conveniences
of a bank account, including mobile apps, electronic bill payment, high-quality
customer service, alerts, easy access to reloading, and fraud protection as well as
ways to gain rewards—all with low setup and maintenance fees.
The two fastest growing segments of prepaid are open-loop gift cards in the form of
general purpose nonreloadable gift cards and general purpose reloadable cards. T
the purchase demographics are changing, with open loop gift cards are no longer
bought more often by lower income earners. Today, higher-income earners
(household income $100,000 or more) are more likely to buy GPR cards than in
previous years. Mercator Advisory Group expects that as open-loop prepaid cards
become more ubiquitous and begin to offer more services once provided only by
financial institutions, prepaid cards will be more broadly used by U.S. consumers as
a money management tool, especially for their privacy, convenience, and enhanced
security.
Consumers and Prepaid: Rising Use, Especially by
Mobile

4. 2014 Mercator Advisory Group
“Even if they have a checking account, many U.S.
consumers are attracted to prepaid cards as a money
management tool that lets the cardholders control their
spending and make electronic payments from funds they set
aside, without accruing debt from credit cards or attaching
their bank account to the transaction,” states Karen
Augustine, manager of CustomerMonitor Survey Series
at Mercator Advisory Group and the author of the report.
“Prepaid buyers are more likely to be younger, mobile-
enabled, and are more attracted now by enhanced security
and mobile banking features.”
Karen Augustine
Manager
Primary Data Services
Mercator Advisory Group

5. 2014 Mercator Advisory Group
• Year-over-year trending of prepaid card use by seven categories of prepaid
cards (including retailer-specific, general purpose and reloadable cards) and
consumers’ recollection of cards purchased and monthly load volume
• Shifts in the demographics of prepaid card and virtual card users, the ways
consumers are using them, and the factors motivating preferences in distribution
channels
• Importance of rewards to drive prepaid card purchases
• Use of online gift card exchanges
• Purchase behavior regarding GPR cards, including length of time card is in use,
load frequency, and awareness and use of direct deposit to GPR cards
• Brand awareness, purchase, timing, and current use of 10 GPR card brands
Highlights of this Survey and Report

6. Figure 17: Email from FI Is Consumers’ Preferred Way
to Learn About New Financial Products and Services
© 2014 Mercator Advisory Group
Source: Mercator Advisory Group CustomerMonitor Survey Series, Banking and Channels 2013, Question 27

7. About the full Survey and Report
2014 Mercator Advisory Group
The report is 60 pages long and contains 29 exhibits.
Members of Mercator Advisory Group CustomerMonitor Survey Series
Service have access to this report as well as the upcoming research for the
year ahead, presentations, analyst access and other membership benefits.
Please visit us online at www.mercatoradvisorygroup.com.
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visit us at www.PaymentsJournal.com.
For more information and media inquiries, please call Mercator Advisory
Group's main line: (781) 419-1700, send email to
media@mercatoradvisorygroup.com.
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8. About Mercator Advisory Group
Mercator Advisory Group is the leading independent research and advisory
services firm exclusively focused on the payments and banking industries. We
deliver pragmatic and timely research and advice designed to help our clients
uncover the most lucrative opportunities to maximize revenue growth and
contain costs.
Our clients range from the world's largest payment issuers, acquirers,
processors, merchants and associations to leading technology providers and
investors. Mercator Advisory Group is also the publisher of the online
payments and banking news and information portal PaymentsJournal.com.
2014 Mercator Advisory Group