Financial Inclusion

Who’s Really Driving Mobile Payments (You’ll Be Surprised)

The leading users of mobile payments in the U.S. are the people who also use prepaid cards, according to a report titled “Prepaid and Gift Cards in the U.S.” by market-research publisher Packaged Facts.

That includes customers who disproportionately fall into the unbanked and underbanked categories — more than 25 percent of Americans. Smartphone penetration is actually higher among groups underrepresented by traditional banking products and services: The survey says 89 percent of consumers from underbanked households have a smartphone, and even 64 percent of consumers from unbanked households have one, Chain Store Age reported.

Among all U.S. adults, about 56 percent have smartphones — roughly 80 percent use mobile phones, and 70 percent of those users have smartphones, according to a study released in July 2014 by Asymco.

In addition, adults under age 35, who are also more likely to be less-banked than their elders, do more card shopping and have a wider variety of cards in their wallet. The study estimates that Americans under 35 carry an average of 2.3 prepaid cards in their wallets.

Survey results also indicate that mobile-forward platforms with Millennial-era options such as P2P and bill payment will entice 18-34-year-olds to stay with specific payment platforms longer, according to the Packaged Facts report.

Mobile payments are also evolving the definition of what a “banked” customer is.  In a recent interview with MPD CEO Karen Webster, NetSpend President Chuck Harris explained how prepaid cards are leading to the rise of the  “self-banked” – those people who like and need the flexibility that stored value products offer.





On Tuesday, March 31, 2020 at 9:00 AM (ET) join PYMNTS CEO Karen Webster and panelists Vincent Kilcoyne and Roland Brandli of SmartStream for an in-depth discussion on the need to use transformative digital strategies to remain relevant in today’s challenging financial landscape. The discussion will cover strategies that will allow clients to improve operational control, reduce costs, build new revenue streams, mitigate risk and comply accurately with regulation.

1 Comment