Boston Fed: Unbanked More Likely to Use Prepaid Cards

People without checking accounts are nearly twice as likely as those who do have checking accounts to own a general-purpose, reloadable prepaid card, according to researchers at the Federal Reserve Bank of Boston. Twenty-four percent of the banked have a prepaid card, while 45 percent of the unbanked do, they found.

The 4.8 percent of U.S. adults who do not have a checking account but who do have a prepaid card are more likely to have wages deposited to their prepaid card and more likely to use it to make payments, indicating — the researchers said — that prepaid cards are substituting for checking accounts for unbanked customers.