By Ben Jackson, Sr. Analyst,Mercator’s Prepaid Advisory Service
Cash access is needed in prepaidprograms for three primary reasons.
First, even as technology providesconsumers with ever-increasing ways to pay for what they consume,no one has completely given up cash yet. In fact, consumers likecash for some types of transactions and in uncertain times. Sometypes of retailers, gas stations in particular, have made cash moreattractive by offering lower prices to customers who paycash.
Second, recent laws may make cash moreappealing both to consumers and merchants for transactions.TheDodd-Frank Wall Street Reform and ConsumerProtection Act of 2010 contains provisions that may shake up thepayments landscape, which will be discussed in more detaillater.
Third, offering cash access can make money for paymentscompanies. ATM and cash back fees may provide sources of revenueand a way to steer cardholder behavior.
More research remains to be done, but as the costs and benefitsof card and cash use change, payments providers ignore cash accessat their own peril.
View Mercator Advisory Viewpoint on this topic: http://mercatoradvisorygroup.com/index.php?doc=Prepaid&action=view_item&id=510&catid=16