Some consumers continue to become more dissatisfied with banks because of the product and service fees they assess and are considering alternative products to checking accounts, such as prepaid cards, according to Mintel Comperemedia, a Chicago-based research firm.
A recent online survey Mintel conducted involving 2,000 U.S. adults found that 19% of respondents said they would be interested in using prepaid cards to pay bills if the cards offered low fees and they could avoid overdraft, over-limit or other types of banking fees.
Consumers are disenfranchised with banks because they see them as commoditized, says Susan Menke, Mintel vice president and behavioral economist. “Consumers bank at big banks because of convenience, but satisfaction levels are pretty low,” she says. “It’s an industry that consumers put up with, but they don’t feel banks are really doing what is best for them.”
But banks should pay attention because consumers are expressing an interest in switching to different products, Menke says. “These are early warning signs to the banking industry that they have to think really carefully about their relationships with consumers because consumers are not happy,” she says. “Banks need to restructure and rethink those relationships.”
Affluent consumers also are taking a close look at prepaid, which many insiders have viewed as being more ideally suited for underbanked or unbanked individuals. Of those surveyed, 25% of households earning more than $100,000 per year said they were interested in using prepaid cards mainly to avoid fees.
To attract users, prepaid providers should offer incentives, Mintel data show. Approximately 60% of respondents said they would be interested in prepaid products if they were offered a rebate or cash back, while 70% found merchant purchase discounts to attractive offers.
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