More companies are adding financial health programs to their benefits, creating a market that fits with one of the common uses consumers have found for prepaid cards.
Prepaid has many segments — gift cards, bank account alternatives, insurance payouts, etc. — including a group that uses the cards as budgeting tools. These consumers devote cards to specific categories of spending, such as groceries, so as to limit the funds available for that expense.
Prepaid card marketers have sometimes encouraged this use case through the addition of
“Historically, the financial wellness employer benefit was just an education platform, stuff like saving and spending appropriately,” said David Kilby, president of FinFit, a Virginia Beach-based fintech that supplies about 125,000 employers with wellness platforms.
FinFit has launched a Visa prepaid card designed to support direct deposits, bill pay, reloading and other services. FinFit is hoping to reduce the use of cash and checks by employees by digitizing these functions and tying payments more directly to other financial wellness products.
The company also hopes to serve an expanding financial wellness market. More plan sponsors are offering financial wellness as a benefit package, with 21 percent of U.S. companies offering the service in 2018, up from 16 percent in 2016, according to
“We’re definitely going to see more employers offer these types of financial wellness perks moving forward,” said Brian Westfall, a senior HR analyst for Capterra. “Companies may not have asked to take on this responsibility, but now that they’re suffering the consequences of a financially stressed workforce like lower productivity and higher turnover it’s forced their hands to get involved.”
These numbers are also feeding a diversification in wellness products. FinFit offers personalized assistance, credit resources, student loan consolidation concierge and short-term lending for emergencies, which FinFit positions as an alternative to payday loans, 401(k) loans and payroll advances. It also perform user-driven assessments of spending, savings, retirement, long range planning, and a mix of credit and debit payments. It also has gaming and dashboards to assess HSA/FSA health plan impacts, real estate payments and retirement planning in individual budgets.
“The idea of better saving and spending is great, but everybody has unique requirements,” Kilby said. “It’s like trying to read the bible and figure out which parts of for. What we’re doing is analyzing the members so we don’t waste time by pinpointing things that aren’t relevant to the users’ behavior. Someone who’s renting may not want to know about mortgage interest deductions.”
The prepaid card can tie to the loan product but it is not specific for that use, according to FinFit, which adds the card can tie to any FinFit product. Employees who are approved for loans can have the loan funded onto the prepaid card, but it’s not a requirement. The card is free to obtain and does not have ATM fees if used on the Moneypass network. There are standard fees that are included on a fee schedule that FinFit provides with the card.
FinFit did not provide plan sponsor users for an interview. Other providers of prepaid services tied to employee financial wellness programs include
Employers should look at this as a positive, Westfall said. “If their workers are financially stressed, but they don’t have the means to raise wages, they can still provide financial wellness tools, resources and expertise to help employees better manage what they earn. That, in turn, should help with engagement and retention.”
