Walgreens recently announced its plans to launch a prepaid debit card. The new Balance Financial prepaid card will serve as an alternative to cash and will offer a range of financial services including check cashing, online bill payments and direct deposit of paychecks.
Walgreens’ entrance into the prepaid market is evidence of the growing trend of retailers targeting unbanked customers with prepaid products. In a press release, Walgreens pointed out there are 60 million Americans who lack an easy way to manage their finances and complete financial transactions, such as paying bills and depositing paychecks. By offering a prepaid card focused on convenience and loyalty, Walgreens is reaching out to a specific segment of customers in a new way.
Walgreens’ ubiquity and accessibility may be a driving factor for some consumers to purchase its new prepaid offering. Walgreens’ prepaid card has already been introduced in 250 Walgreens locations in Detroit, Nashville and Milwaukee.
As this new entrant into the prepaid game shows, consumers and retailers are increasingly seeing the value provided by prepaid cards’ unique combination of services. As more and more retailers roll out their own prepaid offerings, an increase in consumer awareness and usage will no doubt follow. It will then become more important than ever for community financial institutions that issue prepaid cards to develop a competitive strategy for the continued success of their programs.
