A seismic shift seems to be occurring in what payment devices younger generations of consumers are opting to use. Synergistics Research Corp. research published in The Future for Prepaid Cards suggests that younger generations are adopting prepaid cards - especially general purpose reloadable (GPR) cards - at an accelerating rate.
Synergistics found that the proportion of consumers who use GPR cards has doubled since 2008.
According to Synergistics, the reasons for this phenomena are threefold: heavy promotion of prepaid products in the marketplace, legal and regulatory issues that favor prepaid card usage over credit and debit card usage, and the increasing comfort of consumers in using payment cards in general.
Based on its research, Synergistics advises financial service providers to implement prepaid card programs to enjoy their share of the growing prepaid market.
"Not only should prepaid card programs be undertaken for their revenue opportunities, but also as a defensive measure as consumers, particularly younger consumers, turn to prepaid cards as substitutes for other transaction vehicles, such as checking accounts and credit cards," Synergistics said.
Source: Synergistics Research Corp., The Future for Prepaid Cards, January 2012
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