Prepaid Earns High Marks on CFSI Scorecard (March 13, 2014)
The Center for Financial Services Innovation (CFSI) gives the prepaid industry an A-. In its first Prepaid Industry Scorecard, intended to measure the quality of the current prepaid marketplace by evaluating a selection of programs against CFSI’s Compass Guide to Prepaid, the nonprofit gave the industry high marks for the adoption of practices necessary to meet consumers’ transactional needs and to be considered “high-quality” financial products.
The Scorecard analyzed 18 prepaid cards, ranging from those issued by the largest program managers, to smaller program managers with “particularly innovative” cards. Together, the 18 programs represent 90 percent of the total GPR marketplace, according to CFSI. “The whole point of the Compass Guide to Prepaid was to drive change in the industry and to get providers to up their games,” Jennifer Tescher, CFSI president and CEO, tells Paybefore. “Qualitatively we were seeing that, but it was impossible to know quantitatively if the guide was effective. We created our Prepaid Industry Scorecard to assess the level of quality in the current prepaid marketplace, providing a set of benchmarks for providers and identifying opportunities for growth.”
Among the factors that boosted the industry’s grade were providing consumers with multiple, convenient ways to perform basic transactions and access account information, fee structures designed to promote positive use and straightforward fee disclosures. While the industry earned high marks in those areas, the report cited room for improvement in offering additional services designed to promote positive consumer use and delivering sustained value to cardholders and providers. “The good news is that by and large the industry has got the core practices down,” Tescher says. “Where we are redoubling our efforts is to promote the next-generation practices, like budgeting tools, savings and exploring how to think about making high-quality credit available, so prepaid becomes a more sophisticated financial tool.”