Report: Prepaid Debit Usage Varies More by Age than Income (Dec. 3, 2013)
Though the common perception is that prepaid debit cards are designed for, and popular with, low-income consumers, demand for the product spans the income spectrum, according to a report by Aite Group LLC.
The report, based on a survey of 1,242 U.S. consumers conducted earlier this year, divides consumers into six income groups, ranging from less than $15,000 up to $199,999. Analysts found that all six income groups were separated by only four percentage points. On the low end, 21 percent of consumers in the $30,000 to $44,999 and $45,000 to $69,999 income groups use prepaid debit cards and, on the high end, 25 percent of consumers in the less than $15,000 and $70,000 to $99,999 income groups use prepaid debit cards.
“This demand comes from a range of consumers across the income spectrum [and the] common thread is the desire to use the product as a new tool to help them manage their financial lives,” notes the authors of “Prepaid Debit Card Realities: Cardholder Demographics and Revenue Models.”
While demand for GPR prepaid cards is somewhat evenly distributed across income, the report indicates interest in prepaid depends on the consumer’s age. One-third of Gen Y and 28 percent of Gen X consumers have a prepaid debit card, while 15 percent of Baby Boomers and 7 percent of seniors have one, according to the report.