A growing trend amongst consumers in the US, who have had enough of costly bank fees are closing their accounts and signing up for newly popular alternatives, customer-friendly prepaid debit cards and employee-payroll cards.
The market is growing rapidly and is expected to grow year on year by 20%. This growth would see values loaded onto debit cards more than double from $56.6 billion in 2010 to $106 billion by 2016. Payroll cards would see dollars loaded onto them more than triple, from $20.9 billion to $62.6 billion.
Many of the new cards have eliminated or reduced their activation, annual and monthly fees.
Meanwhile, usage of employer programs for payroll cards are “accelerating”. Employer programs with the largest pools of prospective cardholders include McDonald’s, Walmart and Walgreen. This is great for workers that have no bank accounts and in some cases employees can convert some payroll cards into prepaid debit cards.
Madeline Aufseeser, author of a study said “Since free checking is no longer abundant in the market, the opportunity for prepaid-debit and payroll-card sales to debanked or unhappy checking account consumers is growing,”