The number of banks offering prepaid cards to customers who do not use traditional banking may soon increase, it has been claimed.
Many educated and employed people are reluctant to use products such as
credit cards and
personal loans due to hidden costs.
A recent study carried out by global market research company MarketsandMarkets indicated that this group of people – known as the 'underbanked' - could be an untapped market which would benefit from prepaid cards.
Consequently, the organisation believes the number of banks offering prepaid cards is likely to increase, as they realise the customer potential of the underbanked.
"The report identifies the traditional and novel banking and financial services that banks can offer these consumers, indicating prepaid cards as a potential financial vehicle for banks to penetrate the underbanked segment," MarketsandMarkets said.
According to the findings, many people who fall into this category would be prepared to use prepaid cards rather than
current accounts for basic transactions as long as it did not prove more expensive.
It is thought that such consumers could be a significant profit area for banks that are willing to offer alternative financial services.
