TMG White Paper Says Prepaid Cards Can Help Gen Y Gain Financial Independence

Kelly Moore (for TMG)

(Des Moines, Iowa – August 30, 2012) – Coinciding with the back-to-school season, a new white paper released by The Members Group (TMG) explores the power of prepaid products to draw business from students and their parents. Reloadable and gift cards, in particular, the paper argues, help community financial institutions (FIs) solidify existing relationships and attract new customers by tapping the products’ ability to offer financial freedom.

“To ensure the sustainability of their business, credit unions and community banks understand they must find ways to maintain relationships with their 13- to 19-year old customers,” said white paper author Konrad Christensen, TMG retail payments product manager. “Enter prepaid products – they are tailor-made for this demographic, offering teens’ financial freedom and giving peace of mind to their parents.”

In the paper, “The Gen Y Power of Prepaid,” Christensen makes the case for community FIs to market reloadable cards, writing they are ideal for Gen Y. Offering teens overdraft-free access to funds, a prepaid card allows young people to make purchases without the risk of spending more than they have. And, thanks to a reloadable card’s direct-deposit feature, Christensen writes, parents can instantly deposit more money onto the card through an online application, in an issuer’s branch or at many retail and convenience-store locations. The cards also allow teen customers to build internal credit with their credit union or community bank to be used in future loan application processes.

Gift cards – particularly open-loop cards – are also a great product for community FIs to offer Gen Y customers, shares Christensen in “The Gen Y Power of Prepaid.” Because gift cards can be issued quickly and funds are available instantly, the cards allow teens the freedom of choice. Parents, on the other hand, may be drawn to the gift cards’ inability to allow access to cash.

At first blush, this may look like a negative, but some parents are interested in monitoring their child’s spending,” writes Christensen. “This can be done with a reloadable card – until the teen cardholder uses his reloadable card to access cash. From there, the paper trail goes cold. With a gift card, a parent can give a child access to a secure payment method that works at most major retailers – online and off – but doesn’t allow for ATM use.”

And, finishes Christensen, community FIs can successfully market both product lines without the fear that offering a reloadable card will steal gift card sales. “In fact, reloadable and gift cards complement one another,” argues Christensen. For example, writes Christensen, TMG clients that offer both reloadable and gift card programs experienced a 36-percent increase in gift card sales in 2011.

To learn more, the white paper “The Gen Y Power of Prepaid” can be downloaded for free at

About TMG
The Members Group (TMG) is dedicated to creating customized, technology-driven card processing and payment solutions for credit unions and community-based financial institutions across North America. Innovations in fraud management, loyalty programs, alternative payment systems and analytic reporting, and the competitive advantages they create, have helped TMG forge a new standard in offering cutting-edge credit, debit, ATM, prepaid card products and a P2P payment solution. For more information, visit

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