New Consumer Research, Including the Role of Prepaid in Financial Literacy and Access
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  • 1. New Consumer Research,including the Role of Prepaid inFinancial Literacy and AccessKathy SteinbergSenior Research ManagerHarris Poll InsightsHarris Interactive on behalf ofNational Foundation for CreditCounselingEnrique LopezliraSenior Policy Advisor, Economic PolicyNational Council of La Raza (NCLR)Friday, June 28, 20138:30 a.m.-9:30 a.m.John TysonVice President ComplianceACE Cash ExpressWalt HendersonDirector of the EFT Strategy DivisionManagement ServiceU.S. Department of the Treasury© 2013 Network Branded Prepaid Card Association
  • 2. Thank You To Our Sponsors2Presenting SponsorsSupporting Sponsor Welcoming Reception SponsorAssociate SponsorsFounding Sponsors
  • 3. 3The information contained on these slides is considered the proprietaryInformation of the Network Branded Prepaid Card Association (NBPCA). Itmay not be distributed or reproduced without the expressed writtenpermission of an officer of the NBPCA.The opinions expressed by the presenters during this presentation areexclusively their own and subject to change.
  • 4. ACE Values Consumer Advocacy• ACE Cash Express, leading retailer of financial services,including short-term consumer loans, check cashing, autoinsurance, bill payment & prepaid debit card services• ACE saw value in industry collaboration to advance ourcommon goal of financial literacy & has supported NBPCAresearch projects such as NFCC Financial Literacy & NCLR• Product development heavily influenced by research tobest meet the needs of our customers seeking alternativesto traditional financial services4
  • 5. ACE Elite™ Visa® Prepaid Debit Card• Brought on prepaid as a product offering in 2002, in partnershipwith NetSpend®• Innovations over the years include: in-store card activation, charitycard in partnership with The National Breast Cancer Foundation,no-fee cash withdrawals & in store service options• 95% of ACE Elite™ customers would refer a friend or family memberto the product**Based on the 2013 Survey of ACE Elite Cardholders5
  • 6. National Foundation for Credit Counseling• Nation’s largest financial counseling organization,the NFCC Member Agency Network includesmore than 700 community-based offices locatedin all 50 states and Puerto Rico• NFCC Member Agencies provide financialcounseling and education to millions ofconsumers each year in person, over the phoneor online6
  • 7. 2013 Consumer Financial Literacy Survey*Conducted online by Harris Interactive on behalf of NFCC and NBPCA• 7th annual nationally representative survey of U.S. adults(conducted by telephone in prior years)• Field period: March 4-6, 2013• Sample size: 2,037 U.S. adults ages 18+, including n=91** prepaid debit card usersSurvey Topics included:• Budget, Spending & Savings• Getting Paid & Paying Bills• Credit Cards & Credit Reporting• Knowledge of Personal Finance• Financial Problems & Credit Counseling• Prepaid Debit Cards7*Complete Survey Detailshttp://www.nfcc.org/newsroom/FinancialLiteracy/files2013/NFCC_NBPCA_2013%20FinancialLiteracy_survey_datasheet_key%20findings_032913.pdf**Caution: small base (n<100) – results should be interpreted as directional.
  • 8. 2013 Key Findings Highlights*• 2 in 5 U.S. adults – 40% – have a budget and keep close track of their spending• On a scale from A to F, only 18% of U.S. adults would give themselves an “A” on theirknowledge of personal finance• 8% of U.S. adults – or nearly 19 million people – have used a prepaid debit card inthe past 12 months• 6% of U.S. adults – about 14 million people – say they typically use a prepaid debitcard to pay for everyday transactions (“prepaid debit card users”)• Those who regularly use prepaid debit cards do so primarily because they areconvenient (59%) – only about 1 in 4 (24%) rely on prepaid debit cards because theylack other payment/banking options• 81% of prepaid debit card users say they feel more in control of their money with aprepaid debit card, and more than 2 in 5 – 43% – strongly agree• 71% wish their prepaid debit card offered the option to enroll in overdraft protection8*Complete Survey Detailshttp://www.nfcc.org/newsroom/FinancialLiteracy/files2013/NFCC_NBPCA_2013%20FinancialLiteracy_survey_datasheet_key%20findings_032913.pdf
  • 9. National Council of La Raza (NCLR)• Largest national Hispanic civil rights and advocacyorganization in the U.S.• Network of nearly 300 affiliated community-basedorganizations in 41 states, Puerto Rico, and the District ofColombia• Applied research, policy analysis and advocacy in five keyareas: Assets/investments, civil rights/immigration,education, employment and economic status, and health• Capacity building assistance to Affiliates who work at the stateand local level to advance opportunities for individuals andfamilies
  • 10. Alliance for Stabilizing Our Communities (ASOC)• Partnership between NCLR, National Urban League (NUL), andNational Coalition for Asian Pacific American CommunityDevelopment (CAPACD)• Three HUD-certified housing counseling intermediaries thatwork with a network of 95 local housing counseling agencies• 2013 Financial Services Research Project: More than 5,000AAPI, African-American, and Latino clients surveyed in 4 states– CAPACD: California (various cities); Chicago, IL; Houston, TX– NUL: South Florida; Chicago, IL; Houston, TX– NCLR: South Florida; Chicago, IL; El Paso, San Antonio, and Houston, TX(also have a 2012 data set from various California cities)– Full data set will be available in late July, with a report out in late Fall
  • 11. Factors Influencing Where to Bank
  • 12. Banking ServicesQ: What are the top 3 factors you consider when deciding orchoosing where to do your banking or other financial transactions?
  • 13. Tools for Financial TransactionsTool Total (%) Men (%) Women (%)Cash 69 70 68Debit card 52 48 55Credit cards 35 35 34Checks 9 9 9EBT/public benefit 8 7 9Gift cards 7 6 8Prepaid cards 4 4 4Other 1 1 1N 5,376 2,142 3,225
  • 14. Tools for Paying BillsTool Total (%) Men (%) Women (%)Cash 45 47 43Debit card 39 37 40Internet 30 26 33Check 28 26 29Credit cards 22 24 21Money order 11 13 10Prepaid cards 3 3 3Kiosk in store 2 1 2Gift card 1 1 1N 5,386 2,149 3,228
  • 15. Mobile BankingTotal (%) Men (%) Women (%)Yes, online 39 38 40Yes, mobile 5 5 6Yes, both 12 11 13Neither 39 41 37N 5,369 2,142 3,219
  • 16. Direct Express® Prepaid Debit MasterCard®• Offered by the U.S. Treasury through an agreement withComerica Bank• Meets Treasury’s requirement to make a low-cost accountavailable to unbanked federal benefit recipients• Key component of Treasury’s all Electronic effort• Available for SSA, SSI, VA, Railroad Retirement, OPMannuities, Labor – Black Lung disabilities• Over 3.5 million cardholders16
  • 17. Consistently High Cardholder Satisfaction• Satisfaction among those who signed up for the Direct Express® after May 1, 2011 is equally high• 93% of cardholders would recommend the Direct Express® card to a relative or friend*Research conducted by KRC Research on behalf of Comerica Bank and MasterCard179394952009 2010 2011 2012Customer Satisfaction(Percent Satisfied or Very Satisfied)Percentage
  • 18. Continuous Cardholder Education is Key• Significant increase in awareness of text alerts and the ability to paybills like utilities, by phone.• Four in ten remain unaware of surcharge-free ATMs• ATM withdrawals and purchases remain the most prevalent uses ofthe card, while paying bills by phone (now over half) and Internetpurchases (now about three in 10) have increased significantly overthe past two years• Innovative financial literacy efforts drive behavior - PayPerks® -rewards based program18
  • 19. Questions?• Thank you for attending New ConsumerResearch, including the Role of Prepaid inFinancial Literacy and Access19