Paving the Way Forward: Savings On Prepaid Cards

Paving the Way Forward: Savings On Prepaid Cards

This paper reviews a collaboration between D2D and Banking Up to design and evaluate an emergency savings feature on their UPside prepaid card, providing insight into the potential impact on consumers and prepaid card providers. The work discussed in this report uniquely focuses on: 1) An emergency frame - Exploring an emergency savings offering on a prepaid card. 2) Active consumer engagement - The design of a savings feature focused on actively engaging consumers, especially underserved ones, in savings. 3) Careful evaluation - An evaluation to share with the marketplace the potential impact of the savings feature on both consumers and prepaid card providers.

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Key Takeaway

Prepaid cards have become more widely used, and may provide the opportunity for a creative new way of boosting savings rates.

Key Learnings

  • The prepaid card industry is large and steadily growing, make it a perfect way to meet an expanding new market of potential savers.

  • Adding a savings feature to an existing product makes it easier to use and more accessible, compared to creating a separate new savings product.

  • Tax time is an ideal opportunity to save a larger than normal amount of money, and having an easily accessible savings vehicle makes people more likely to save it.

Key Findings

  • In 2009, 32% of US households used prepaid cards, and the number is growing.

  • In a pilot test, savings pockets on prepaid cards had higher take-up rates compared to other saving product offerings.

  • During tax time, there was a significant spike in the amount of deposits into prepaid card savings pockets.

Challenges

Related Challenge