How Are U.S. Consumers Using General Purpose Reloadable Prepaid Cards? Are They Being Used as Substitutes for Checking Accounts?

2015 • No. 15–3
By Claire Greene and Oz Shy

Full Text Document (pdf)

Owners of general purpose reloadable prepaid cards (GPR) who do not have checking accounts comprise 4.8 percent of U.S. adults, according to the 2012 Survey of Consumer Payment Choice. This report explores two important aspects of prepaid card use: Do owners of GPR prepaid cards who lack checking accounts use these cards differently than those who have checking accounts? Are these cards substituting for payment services that have traditionally been provided only via traditional checking accounts?

  • Key Findings

    • Holding income and demographic factors constant, U.S. consumers without checking accounts (those who are "unbanked") are significantly more likely to own a GPR card than consumers with checking accounts (those who are "banked").
    • Among GPR card holders a larger fraction of unbanked consumers than banked consumers receive their income directly to their GPR card.
  • Exhibits

  • Implications

    Controlling for the number of payment instruments they adopt, unbanked consumers are not more likely than banked consumers to use a prepaid card.

  • Abstract

    Owners of general purpose reloadable prepaid cards (GPR) who do not have checking accounts comprise 4.8 percent of U.S. adults, according to the 2012 Survey of Consumer Payment Choice. This report explores two important aspects of prepaid card use: Do owners of GPR prepaid cards who lack checking accounts use these cards differently than those who have checking accounts? Are these cards substituting for payment services that have traditionally been provided only via traditional checking accounts?

    Holding income and demographic factors constant, U.S. consumers without checking accounts (those who are "unbanked") are significantly more likely to own a GPR card than consumers with checking accounts (those who are "banked"). In addition, among GPR card holders a larger fraction of unbanked consumers than banked consumers receive their income directly to their GPR card.

    Controlling for the number of payment instruments they adopt, unbanked consumers are not more likely than banked consumers to use a prepaid card.