New Report Gives Prepaid Industry an A-

Latest Findings Measure Quality in a Growing Market

CHICAGO--()--CFSI’s first Prepaid Industry Scorecard assesses the level of quality in the current prepaid marketplace, providing a set of benchmarks for providers and identifying opportunities for growth. The report evaluates prepaid card programs against standards defined in CFSI’s Compass Guide to Prepaid, which provides recommendations for prepaid card issuers to improve the design and delivery of prepaid products. The Scorecard gives the industry an A- for the adoption of basic practices necessary to meet consumers’ transactional needs and to be considered high-quality financial products.

The Scorecard also highlights opportunities for programs to stretch beyond the basics by offering additional services designed to actively promote positive consumer use and deliver sustained value to both cardholders and providers. For these kinds of additional, advanced practices—identified as Stretch and Next Generation in the Compass Guide to Prepaid—the industry received a B and a C- respectively.

“We have seen tremendous growth and innovation in this space,” said Jennifer Tescher, President & CEO, CFSI. “But, there are opportunities and demand for providers to go further, to help consumers build healthier financial lives.”

The Scorecard analyzed 18 prepaid cards, including cards issued by the largest program managers in the marketplace and a sampling of smaller program managers that have particularly innovative cards. These cards represent approximately 90% of the total GPR marketplace. Using both quantitative and qualitative analysis, the report measures the degree to which prepaid card programs have adopted the recommendations articulated in the Compass Guide to Prepaid.

Currently, prepaid cards provide consumers with multiple, convenient ways to perform basic transactions and to access important account information. Fee structures are generally designed to promote positive consumer use and individual fees are communicated to cardholders in a straightforward and accessible manner. However, developing supportive customer service policies and offering additional benefits such as surcharge-free ATM networks and companion cards tied to sub-accounts would make prepaid cards more valuable and versatile financial tools. Providing access to budgeting tools, savings platforms, and high-quality credit would further allow prepaid cards to serve as sophisticated financial management tools.

“We are establishing benchmarks against which we can measure future efforts in the industry,” said Rachel Schneider, Senior Vice President, Insights & Analytics, CFSI. “These benchmarks and recommendations are important today because they reveal real opportunities for innovation in the marketplace.”

The Prepaid Industry Scorecard is supported by the Annie E. Casey Foundation, the Ford Foundation, and the Omidyar Network. We thank them for their support but acknowledge that the findings and conclusions presented in this report are those of the authors alone and do not necessarily reflect the opinions of these organizations.

To read the Prepaid Industry Scorecard, visit http://www.cfsinnovation.com/content/prepaid-industry-scorecard.

About CFSI:

The Center for Financial Services Innovation (CFSI) is the nation’s leading authority on financial services for underserved consumers. Through insights gained by producing original research; promoting cross-sector collaboration; advising organizations and companies by offering specialized consulting services; shaping public policy; and investing in nonprofit organizations and start-ups, CFSI delivers a deeply interconnected suite of services benefiting underserved consumers. Since 2004, CFSI has worked with leaders and innovators in the business, government and nonprofit sectors to transform the financial services landscape. For more on CFSI, go to http://www.cfsinnovation.com and follow on Twitter at @CFSInnovation.

Contacts

Media Contact:
CFSI
Kathleen Smith Shelton, 312.881.5868
Sr. Associate, Marketing Communications
ksmithshelton@cfsinnovation.com

Release Summary

CFSI’s first Prepaid Industry Scorecard assesses the level of quality in the current prepaid marketplace, using both quantitative and qualitative analysis.

Contacts

Media Contact:
CFSI
Kathleen Smith Shelton, 312.881.5868
Sr. Associate, Marketing Communications
ksmithshelton@cfsinnovation.com