As Credit Cards Falter, Cash Variety Gains Popularity
Three small companies are playing a role in a business that has been growing as the economy’s troubles have deepened — the business of prepaid cash cards.
The cards, which have the Visa, MasterCard and Discover logos, act like portable checking accounts, though they are replenished with deposits made at retail outlets rather than banks.
The business serves a market that has existed for decades among the 44 million adult Americans who do not have bank accounts.
And some experts put the size of the market even higher, at 73 million, to include potential cash card customers who have little access to bank services because they have low incomes and are unable to maintain minimum account balances.
Yet the number of “unbanked” and “underbanked” people is growing rapidly in the current economic crisis.
The Mercator Advisory Group, a research service focused on the credit and payments industry, estimated in November that the volume of transactions on general-purpose prepaid cards totaled more than $4 billion in 2008. It forecasts an increase to $7.2 billion in 2009 and $10.8 billion in 2010.
Photo by woodsy.
Jaclyn on March 27th, 2009 12:38 pm
I personally think prepaid credit cards are the best thing out there ever wether the times are tough or good. I however have never been one to believe in credit cards, i know too many people who have put themselves so far in debt that they will never see day light and have no choice but to screw up their credit because they have to file for bankruptcy. i think credit cards are the worst invention ever! it’s not free money people, you still owe that money down the road. those payments will always be there! I have always believed in cash. if you don’t have the cash to buy what your looking at, then you don’t need to buy it.
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