Hopeful for Revenue from New Prepaid Cards, Big Banks Can Deploy Multiple Marketing Strategies to Drive Online Awareness

in Financial Services by Jennifer Canfield — January 7, 2011 at 1:45 pm | 3 comments

Traditionally, big banks have not focused on the prepaid card market, typically comprised of low income consumers seeking a checking account replacement. But as new federal restrictions on debit cards threaten a significant source of revenue, financial institutions such as Bank of America and U.S. Bancorp are wading into prepaid waters. Capital One has been one of the few traditional banks offering prepaid cards. And of all the banks offering prepaid cards, Capital One has the most sophisticated Web presence, emphasizing the benefits of prepaid cards, including flexibility and convenience.

Driven by volume not high margins, the prepaid industry isn’t a sure bet for new players and thus, banks will need to carefully consider how and where to advertise online.

To better understand where some of the key successful prepaid card sites are securing traffic, we took a look at netspend.com, greendot.com, and walmartmoneycard.com. What we found was interesting because the three companies were successfully employing three unique online marketing strategies to drive traffic.

The top sites referring people to netspend.com weren’t surprising – yahoo.com, google.com, and facebook.com – revealing that netspend.com is using a Web portal and search strategy to build awareness. However, when we looked at the top growing referring sites, we found that third party reward sites were the fastest growing marketing partners.

Walmartmoneycard.com is also using a Web portal and search strategy, but they effectively enhance that strategy leveraging walmart.com’s strong online presence to bolster traffic. Walmart.com has a robust MoneyCenter providing lots of information about prepaid card benefits and applications, helping to drive awareness and traffic to the MoneyCard.

When we take a look at mygreendot.com, we see they are doing something completely different. The top referrers to mygreendot.com are 1) inboxdollar.com, 2) sendearnings.com, 3) rewardport.com, and 4) dollarsurveys.net, four niche miscellaneous traffic sources advertising rewards for online activity like checking email, shopping online, and taking surveys.

As you can see from the Compete comparison chart, all three of these prepaid card sites are doing a good job building traffic. Banks entering the market can learn a lot from their successes using Web analytics to make decisions about where and how to position themselves online. Given that banks will compete not only against each other, but also against established companies like GreenDot and Walmart, a clearly thought out online marketing plan and Web presence is essential.

It is useful to consider, however, while prepaid cards may be a potential solution to the revenue loss problem in the immediate term, it is quite possibly a short-lived one – perhaps soon enough replaced by mobile payment technology. We will all have to stay tuned on that front…

About Jennifer Canfield: Jennifer Johnston Canfield is a Senior Associate in Financial Services at Compete. Jennifer is responsible for providing competitive analysis to financial services clients. Before Jennifer joined the Compete team she was a social media marketing consultant. Connect with Jennifer on Twitter (@jbjcanfield) or LinkedIn (http://www.linkedin.com/in/jenniferjohnstoncanfield).

Tags: banking credit cards