= Subscriber content; or subscribe now to access all American Banker content.

Mobile Remote Deposit Capture May Help Prepaid Providers Tap Underbanked Market

US Banker  |  May, 2011

Prepaid debit card providers might gain new customers by adding mobile remote deposit capture services because underbanked consumers see value in the technology, suggests new survey data.

Of the 322 underbanked mobile phone users with a household income of less $40,000 Synergistics Research Corp. surveyed online and by phone in January and February, 36 percent said they were aware of remote deposit capture and 30 percent saw value in the service. Synergistics defines “underbanked households” as those having a checking or savings account but no other depository, savings or investment accounts.

The survey results suggest mobile remote deposit capture could be the missing link that turns a prepaid account into a mirror image of the traditional checking account, says Bill McCracken, Synergistics chief executive.

“Given that these consumers are viewing the prepaid product as their checking account, the ability to take a paper check that someone has given them and deposit it into the prepaid card account is extremely attractive,” McCracken says.

In all, Synergistics surveyed 1,000 consumers. Some 800 participants had household incomes of less than $40,000, while the 200 others had household incomes of more than $40,000.

Synergistics did not make the full study available.

Consumers with a household income of less than $40,000 appear to be a sweet spot for prepaid providers, the survey data suggest.

Some 30 percent of respondents in that income range used a prepaid debit card, and 40 percent for respondents between the ages of 18 and 34 regularly used them, the survey found. Moreover, 20 percent of all respondents said they used a prepaid debit card as their default checking account.

Green Dot Corp. and Plastyc Inc. both have discussed adding mobile remote deposit capture as a service offering, McCracken says.

A Plastyc spokesperson says the company is seeking a partner that would handle risk management associated with the technology. Green Dot did not return a request for comment.

“The [provider] that gets there the quickest and markets it the best is going to have a pot of gold at the end of the rainbow,” he adds.


In this episode of Breaking Banks: American Banker's Innovator of the Year, John Hope Bryant of Operation Hope; Richard Brown and Charley Cooper of the blockchain consortium R3; and Ravi Srinivasan, who describes India's drastic move to stamp out cash.