The Consumerist writes today about the hidden cost of prepaid debit cards and the impact that these fees are having on the U.S. economy. Editor Ben Popken writes, with credit cards harder to come by and more annoying to use, the prepaid debit card market is projected to explode from $8.7 billion loaded on the cards to $119 billion in 2012, but a good chunk of that is going to be eaten up by hidden fees and gotchas. Popken gives a brief run-down on some normal costs.
$1.75 for each ATM withdrawal
$1 for each ATM balance inquiry
$.50 for each purchase
$4 monthly maintenance charge
As a prepaid card professional, what do you think of this analysis? We'd like to hear your thoughts.
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1 comment:
I find this analysis interesting and would like to see the metrics used to develop the costs.
What is the monthly transaction pattern that results in these costs?
Also, were the prices used based on a weighted average or simple average? That is, were the prices based on the cards with the most customers?
Finally, I view these costs from a different perspective. Please refer the my recent report, Payment Systems Evolution and Branded Prepaid Card Analysis, published in October (see http://nbpca.com/docs/Study-Cost-of-Prepaid-Cards-to-Consumers.pdf).
I believe that the largest payroll branded card and general purpose reloadable cards are more cost effective than The Consumerist Report leads one to believe. Yes, the Millennium Card is priced at the high end, but its penetration in the market does not impact many consumers, Additionally, since no one is forced to use any particular vendor, the consumer can make a choice to pick the card with costs and features best suited to their needs.
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