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.

 

 

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Latest Insights: 

The Payments 2022 Study: Building A High-Performance Payments Team For Fraud Detection, a PYMNTS collaboration with Stripe, examines how digital platforms of all sectors and sizes plan to develop their anti-fraud teams as part of their their broader growth and development strategies. Drawing from an extensive survey from approximately 250 payments heads at digital platforms in the U.S. and abroad, our study analyzes how poor anti-fraud capabilities can harm platforms’ long-term growth strategies, and how they can build high-performing teams to tackle these challenges.

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