Debit 201: Exam Results

As a true test of you knowledge and understand we purposed the below questions as a wrap up to Debit 201. We have posted the results of last weeks exam and encourage you to take the test for yourself if you have not done so already.

Question 1: What group do you believe was the primary driver of prepaid card growth in its infancy?

a) Financial institutions, who were looking for interesting ways to attract new customers (38%)
b) Processors, who were looking for incremental utilization on their debit processing platforms (0%)
c) Networks, who were looking great ways to attract new participants and segments (0%)
d) Retailers, who were looking for more cost-effective ways to support (62%)


Question 2: What was the biggest driver of consumer adoption of prepaid cards at the outset?

a) Loved rewards and incentives provided by electronic payments (0%)
b) Loved convenient options for special-purpose application of funds (defined gift, etc) (62%)
c) Forced to use prepaid cards for returns & store credits by retailers (25%)
d) Grew accustomed to retailer-specific closed-loop prepaid as cash replacement and then expanded from there (13%)


Question 3: From our focus on the transformative effect of general purpose reloadable, what is the most significant benefit for the cardholder in our story?

a) Automated electronic paycheck deposit without paying a check-cashing fee (50%)
b) Anytime ATM access for cash and POS access for purchase (38%)
c) Taking the kids to the library while paying bills online (0%)
d) Depositing additional funds from a second job at the POS while buying groceries (12%)


Question 4: IF a large population of consumers migrates from traditional retail deposits at financial institutions to prepaid, what will be the biggest driver?

a) The Federal Reserve interpretation of Durbin craters debit card profitability, forcing financial institutions to take drastic measures to stay afloat (12%)
b) Financial institutions take the opportunity of Durbin cover to prune consumer segments that are high cost to serve (50%)
c) Consumers find a much more attractive product in the flexible applications of GPR prepaid with all the transaction and service features they want (25%)
d) Program managers and retailers create a juggernaut of product features and advantaged distribution, attracting otherwise satisfied consumers away from financial institutions (13%)


Question 5: Which prepaid industry stakeholder will be the biggest winner over the next 5 years of growth in prepaid products?

a) Program managers because the organize the other major participants (38%)
b) Processors and networks because the manage the necessary infrastructure (25%)
c) Retailers because they serve as distributors, acceptance location, load points, and are establishing money services businesses in their own right (37%)
d) Financial institutions because they have most of the customers prepaid players are hoping to win, and they can quickly grow their position and expertise in the category (0%)