Will credit unions climb on the prepaid debit card bandwagon in the hopes of turning unbanked consumers into members?
A report written by Coopera, a strategic partner of the Credit Union National Association, outlines how the nation's not-for-profit financial institutions can expand their membership by adding prepaid debit cards to their product lines. Coopera focuses on the potential for growth in the Hispanic market.
It's an audience banks and credit unions want to attract. In 2006, the Federal Deposit Insurance Corp. predicted that more than half of all retail banking growth in the U.S. over the next two decades would stem from the Hispanic market. Credit unions have been aiming to reach the Hispanic population with a personal finance website, El Poder es Tuyo. The site offers personal finance tips and outlines how the U.S. banking system functions in Spanish.
I did some searching, and it looks like some credit unions are already offering prepaid cards. However, I'm guessing we'll see many more begin to offer them in the near future. Prepaid debit cards have gradually become part of the mainstream as consumers have considered alternatives to traditional checking accounts and debit cards. From college campuses to the nation's biggest bank, the checking account alternative is popping up everywhere. As credit union membership continues to grow, this offering could help fuel that expansion.
Coopera advises to specifically target the Hispanic audience, but increased availability of prepaid debit cards at credit unions would likely be good news for all consumers. My colleagues and I have covered the wide range of fee structures for these pieces of plastic, and credit union cards would certainly make the prepaid industry more competitive. Their not-for-profit status allows credit unions to pass on their savings to their members.
What do you think? Would you consider opening a prepaid card at a credit union?