US Prepaid Retail Purchases to top $200bn in 2014 | Prepaid365

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24 April 2014

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Retail purchases made with prepaid cards in the US will top $200 billion in 2014, accounting for 5% of all retail spending in the States.

It is a clear sign that the cards have entered mainstream use as an increasing number of branded and unbranded cards enter the financial loop, according to Aite Group.

Some cards can be supplied by major card companies such as Visa and Mastercard, while some cards are for specific use in certain locations, such as a Starbucks card for example.

Each card will have different limitations on its usage and many different incentives will be available, dependant on the card offering.

Widespread appeal

In certain cases, the cards are even being used to lure in custom by providing credit rewards and incentives for completing certain purchases, such as cars, or by taking out certain services, such as insurance.

The cards are also featuring more in a work environment within the US, with employers using prepaid cards to pay their staff, a method which is particularly helpful for those without full bank accounts.

These methods simplify payments and increase the ease with which workers can control their finances, as money transfers are immediate.

Prepaid options are increasingly being viewed as a mass market product that can be used by people of all ages, from youngsters right up to the elderly.

Supporting people of all ages

For the younger generation, prepaid cards can teach them about the importance of financial management, while older people can manage their funds to ensure they limit their spending to what they can afford.

This is due to the fact that only the actual funds on a card can be spent, meaning transactions will not clear if the necessary money is not already loaded onto the card in question.

Meanwhile, children do not have access to accounts with credit by using a prepaid option, meaning there is no chance of them going into debt should they spend recklessly.

It is estimated that almost a quarter of the US population are now in possession of a prepaid card and their popularity continues to grow worldwide as well.

More options for consumers

More prepaid card options are entering the market, although it is always important to check on the individual rules and regulations that relate to any specific card.

Some cards, including those given as gifts, can carry set amounts, while others can be constantly reloaded by credit, debit or cash at a number of locations.

Unlike credit and debit cards, prepaid cards are not directly linked to a bank account, making fraudulent activity a lot more difficult to carry out.

For those with concerns over their funds, transferring some to a prepaid card can also help to control spending, while cards can be replaced if they are lost or stolen without funds being affected.

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