Reach Three Imperative Audiences in the Prepaid Market

Great article below from Heinrich Marketing on reaching key consumer segments in the Pre-Paid banking card market. Hispanic being one of them. Univision, the brand icon in the US Hispanic market, has released their own version and is distributing the card through Money Gram.  If Univision makes this kind of effort, totally outside of their expertise of Spanish TV programming  and ad sales, well, it's because there is huge opportunity with their audience that has yet to be fully tapped. However. Hispanidad has been on top of these opportunities for years and helped several major banking brands market to the underbanked Hispanic consumer base.   Want to make this happen for your brand?  We'd love to help. See the article below.

In today’s economic environment, “new audiences” are hard to find. But we can tell you about three big audience segments out there — and they’re only going to continue growing. One has been in the news a lot lately: the college student. With student debt surpassing that of revolving consumer debt, and tuition rising at rates beyond that of inflation, parents and students alike are looking for ways to continue an education without digging an even deeper hole.

Enter the prepaid card. As a method of payment, use of prepaid cards is expected to double by 2014. (Javelin Strategy and Research). And that’s not including gift cards. It’s the “open loop” prepaid card that’s a low-risk way to reach financially challenged segments of the population, and make them loyal customers.

Why prepaid works. With a prepaid card in-hand, consumers without a bank account of their own can still get by in today’s electronic world.  To avoid overdrawing, they can add a finite amount of funds to the card, and use it for payment and purchases. It’s a cash-only approach to spending that avoids credit, and keeps budgets in check — ideal for the debt-ridden student, and for two other key audiences, as well.

Three growing prepaid audiences you can capture and keep

1) The college student (and the parents!)Marketing prepaid to this segment is like a two-in-one opportunity. After all, it’s the parents who are starting to recognize the prepaid card as a handy budgeting tool when they send the kids off to college, and who fund the cards. With your brand’s name on the card, you’re establishing brand trust to an active banking consumer and one who will have his or her own bank account and economic independence soon enough. Wal-Mart leads the way in its two-fold marketing approach to this segment. Its Student Money Card program issues cards to the student and the parent, to make it easier for parents to keep track of spending and add money. (Read it at WSJ)  

2) The Hispanic market

Hispanics are the largest and fastest-growing minority group in
America, according to the U.S. Census Bureau. People of Hispanic origin make up about 15% of the U.S. population; and that ratio is expected to grow to 30% by 2050. Roughly 20 million of this segment are among the “underbanked,” without a bank account or credit. Companies like MoneyGram International and MasterCard recognized the opportunity and recently re-focused their marketing initiatives. 

• Just last month, MoneyGram joined with Univision Communications to make prepaid an easy option for Hispanics. Says Greg Waltz, vice president and general manager of payment products at MoneyGram, “With Univision's strong brand loyalty and MoneyGram's large number of reload locations across the country… the alliance will provide Univision consumers with a convenient option for reloading." (Read it atwww.portada-online.com) 

• In 2009, MasterCard embarked on a huge marketing and educational initiative to Hispanics, recognizing them as “an untapped market” because, as Chris Jogis, SVP, U.S. Consumer Marketing at MasterCard explains, “They're much more used to cash, and in this campaign we are showing and educating them about the benefits of electronic payments." (Read it at AdWeek) 

Prepaid cards offer an opportunity to target this audience with a relevant product, and foster brand trust and loyalty that could last a lifetime.

3) The “underbanked”

According to Javelin Strategy and Research more than one in every five American households is “unbanked or underbanked…meaning they lack a traditional checking and/or savings account.” In the post-housing fallout world, difficulties qualifying for a traditional credit card and negative perceptions about banks might cause these numbers to increase by the end of the year. For this audience, prepaid cards might offer the additional benefit of empowerment through convenience and accessibility.

Is prepaid right for your marketing strategy?

If you already market to any of these three audiences, you need to consider prepaid cards as a strategy. Prepaid cards offer a powerful trifecta of benefits: a revenue stream (based on fees per usage), lead generation and loyalty building. And with audience segments that will only continue to grow and/or mature financially, prepaid cards are a smart way to plan for your business’s future.

Whether you’re just thinking about getting involved in prepaid or are ready to jump right in, let’s talk. Here at Heinrich Marketing, we’ve got the experience and know-how to ease you in and help you find success. Email us today.

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