It’s a wild thought: get paid into a prepaid card rather than a traditional cheque or savings account. The opportunity is interesting not only from the perspective of an individual with the account but also from the bank. A cheque or savings account doesn’t make a bank much money, they usually make their revenue of home loans and savings accounts. In the United States this is especially true as, for years, banks have given free checking in the hopes you would also take out a mortgage, run up your credit card balance or stash away a tidy sum in your savings account. Instead, you’ve been content to use your checking account and bypass the bank’s other offerings. In short, you aren’t making them any money.
Interesting stats about banks aside, for the consumer and especially the underbanked a prepaid card is a perfect solution. For the consumer they can be assured of a certain level of costs and for the bank they can be sure of a certain level of income per month from a prepaid card.
A salary on a prepaid card isn’t a perfect concept yet: how would you make car or house payments? However, for companies that have previously paid their staff in cash, the prepaid card presents a future of safety and security for both the company and staff. The company can either provide a new card monthly or recharge a single card.
While we wont be seeing a prepaid card replacing a bank account for most, for the underbanked it is a perfect solution to cash and the expense of a bank account.