Financial control demand creates prepaid opportunity to replace `jam-jarring'

New pan European study by MasterCard highlights the ‘Power of Prepaid’ to meet consumers’ increasing desire to monitor their own finances

Research conducted by Ipsos on behalf of MasterCard shows that consumers are seeking more control over their own finances. In addition, the research showed that consumers are facing financial concerns that could be aided by the use of prepaid cards.

The research of 2,400 people across six countries found that 77% regularly check their current account balance and 79% know exactly what their credit card limit is.

In an era where many emails are unwanted and the majority of post is junk, money mail is the exception: 66% of people across Europe read all or most of the communications received from their bank or card provider. The demand to take more control over our money coincides with a lack of trust in our banks, with only 54% of people saying that they trust their banks and just 31% saying that their bank provides sufficient information.

The research indicates that prepaid cards can give people greater control over their finances. In fact, when they do begin to take advantage of the features of prepaid cards, 77% of prepaid users experience high levels of satisfaction.

People also believe that prepaid offers more besides money management: 67% of travellers believe it offers greater security when travelling abroad; and 70% of parents of children aged 13 and over think prepaid is a good way to teach children about money management.

The research also revealed that many people continue to employ old-fashioned ‘jam-jarring’ as a way to save, holding back their cash for a rainy day – despite 64% preferring to make payments by card. While some consumers feel assured by this, methods such as prepaid offer a much safer way to save and track money, whilst also having the bonus of money being easy to access without having to physically visit a bank, which only 35% of us do on a regular basis.

Consumers across the countries researched - Belgium, Hungary, the Netherlands, Poland, Spain and Turkey - are realising the benefits of prepaid cards in many different ways:

• Travellers: “If I go abroad, I put money onto the prepaid card because it means I can have some in reserve without having to have cash on me,” said Emma, Belgium.
• Parents: “My daughter has a prepaid card for online shopping – I am happy because I am the one who sets the limit,” said Feyza, Turkey
• Jam-jarring: “The prepaid card helps us because you can’t overdraw. Because there was a period when we just kept spending without thinking, and it then turned out that we couldn’t save anything. The money that I put onto prepaid, I divide across 30 days,” said Marek, Poland

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Technical note

The research was conducted between April & June 2014 with consumers across six markets (Belgium, Hungary, Netherlands, Poland Spain & Turkey) to understand their current financial behaviours and where prepaid currently fits, or has potential to fit, into their lives. The approach was designed with breadth and depth in mind. The quantitative element contained a sample of 2400 respondents, including 1000 prepaid users and 1400 non prepaid users. This was combined with an in-depth ethnographic study, looking qualitatively at how 36 different households live day-to-day, how they manage their finances and where they currently struggle.