As recently as 2009, prepaid debit cards were widely considered an undesirable fee-ridden option primarily used by the underbanked. Flash forward to present day, and they're making a surprising comeback. As of 2015, a full quarter of Americans reported having used a reloadable prepaid debit card. And according to a white paper published by TMG, that same year prepaid debit cards accounted for $23.8 billion of the total $341 billion in online sales.
This rise in popularity is thanks to a combination of factors, including reduced fees, millennials' desire to avoid taking on more debt on top of burdensome student loans, the highly accessible nature of prepaid debit cards, and the rise of contextual commerce.
Let's take a closer look at each of these catalysts for prepaid debit cards' increased usage to help determine if they're a flash in the pan — or here to stay.
Of all the reasons prepaid debit cards are becoming more popular, the rise in contextual commerce is perhaps the most influential, and the one that will keep them around the longest. Cash is no longer king — cards have usurped power. But not to worry. Because they're arguably more secure and more convenient than their paper predecessor, the loss isn't a particularly big one.
To answer our earlier question on whether or not prepaid cards are here to stay: Yes. It's likely that cards in all forms, from traditional debit and credit to prepaid, will be around for a while — if not in the physical sense, then in some shape or form that allows them to conduct the card-not-present transactions required to meet the increasing consumer demand for commerce.
You have fraud frustrations? We have the solutions. Let's discuss what you are dealing with and we can learn more and share how we can help.