Aite Group reveals that at least 14% of bank customers would be better off using prepaid debit cards than checking accounts.

Boston, MA, February 11, 2009 – A new report from Aite Group, LLC argues that prepaid debit cards represent a competitive threat to banks' checking account relationships. It also provides insights into how banks, prepaid debit card providers, payday lenders and other parties can take advantage of prepaid debit cards.

For years, banks in the United States have viewed unbanked and underbanked consumers as a promising segment they could address through traditional checking account relationships. Few banks have realized that new technology and financial products may actually render the checking account relationship less attractive to this customer segment. In fact, at least 14% of checking account holders would be better off switching to a prepaid debit card.

"This is not just doom and gloom for banks," says Gwenn Bézard, research director with Aite Group and author of this report. "The most sophisticated among them could profit on the appeal of prepaid debit cards, as can other obvious stakeholders such as prepaid debit card marketers and payday lenders. For example, banks could rapidly gain market share by striking co-brand deals with leading prepaid debit card marketers that have a head-start in this race."

This 29-page Impact Report contains 24 figures. Clients of Aite Group's Retail Banking service can download the report by clicking on the icon to the right.

Related Aite Group Research:

• Debunking the Myths About the Unbanked and Underbanked
• Nine for '09: Opportunities and Challenges for Banks in 2009
• Branded Prepaid Card Issuing: The Issuers' Voice
• Prepaid Cards: The State of the Industry

To purchase this report or
for additional information,
please contact:
Aite Group Sales
Tel: +1.617.338.6050
sales@aitegroup.com