by Crystina Duran

Experts are predicting the prepaid card market will be valued at more than $10.5 trillion globally by 2027 as usage continues to increase (World Metrics). This data reveals the ongoing relevance of prepaid cards and points to their increasing value as part of a credit union's portfolio. Prepaid cards hold a strong position in financial wellness and inclusion that makes them ideal for building trust, growing a credit union’s market, and strengthening member relationships while diversifying revenue streams.

Grow member trust while supporting financial wellness

Prepaid cards are well-known as valuable tools that support financial wellness. They are a popular tool for budgeting. Among cardholders, 54% use prepaid cards to help them budget and 66% use them to avoid overspending (Pew Trusts). Prepaid cards also offer many other features that help build trust and support financial wellness.

• Convenience and security: Prepaid cards with advanced protections against fraud are much safer to use than cash. They also aren’t tied to the cardholder’s checking account, so this information stays secure while cardholders enjoy the flexibility of being able to shop online or where cash isn’t accepted.
• Real-time purchase tracking: Prepaid cards give users the ability to easily track their day-to-day purchases so they can better review their expenses and spending habits to plan and manage their budgets more effectively.
• Cost-effective: Prepaid cards don’t have interest rates or overdraft fees so cardholders have fewer unplanned expenses to interfere with their budgeting.
• Direct deposit: This prepaid card feature offers fast, direct access to paycheck funds, providing a better alternative to expensive check-cashing services.
• In-app and online card management: These digital options for card management help cardholders have more control over their funds by providing them easy access to their accounts at any time. Cardholders can monitor transactions, budget, freeze compromised cards, set up fraud alerts, and more.

Grow your credit union through financial inclusion and literacy

Prepaid cards play a key role in promoting financial inclusion, both by offering underserved communities a means of participating in the digital economy and by helping them gain a stronger financial position through easier budgeting. Credit unions can encourage cardholders to make the most of prepaid cards as a financial wellness tool through educational offerings like workshops or informative handouts that increase financial literacy. When combined with proactive efforts from credit unions, prepaid cards can help grow financially strong members who are empowered to take advantage of other financial services available through their credit unions.

Strengthening member relationships and diversifying revenue streams

Prepaid cards, especially reloadable cards, can serve as a valuable tool for business growth. These accessible budgeting tools can help attract new members, foster loyalty among existing members, and provide an ongoing income for credit unions.

Conclusion

Prepaid cards thus provide a unique opportunity for credit unions to grow through advancing financial inclusion and member financial well-being. By taking proactive steps to help cardholders make the most of prepaid tools, credit unions can effectively implement prepaid cards as a key component of their product portfolio to support member and credit union success.

To learn more about how Envisant, an award-winning CUSO, can help your credit union develop a prepaid card program to support financial wellness, contact the Envisant sales department at 1-800-942-7124.

Originally published on CUInsight.