New Consumer Research, including the Role of Prepaid in Financial Literacy and AccessKathy SteinbergSenior Research Manager Harris Poll InsightsHarris Interactive on behalf of National Foundation for Credit Counseling

Enrique LopezliraSenior Policy Advisor, Economic PolicyNational Council of La Raza (NCLR)

Friday, June 28, 2013 8:30 a.m.-9:30 a.m.

John TysonVice President ComplianceACE Cash Express

Walt HendersonDirector of the EFT Strategy Division Management ServiceU.S. Department of the Treasury

© 2013 Network Branded Prepaid Card Association

Thank You To Our Sponsors

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Presenting Sponsors

Supporting Sponsor Welcoming Reception Sponsor

Associate Sponsors

Founding Sponsors

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The information contained on these slides is considered the proprietary Information of the Network Branded Prepaid Card Association (NBPCA). It may not be distributed or reproduced without the expressed written permission of an officer of the NBPCA.

The opinions expressed by the presenters during this presentation are exclusively their own and subject to change.

ACE Values Consumer Advocacy

• ACE Cash Express, leading retailer of financial services, including short-term consumer loans, check cashing, auto insurance, bill payment & prepaid debit card services

• ACE saw value in industry collaboration to advance our common goal of financial literacy & has supported NBPCA research projects such as NFCC Financial Literacy & NCLR

• Product development heavily influenced by research to best meet the needs of our customers seeking alternatives to traditional financial services

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ACE Elite™ Visa® Prepaid Debit Card

• Brought on prepaid as a product offering in 2002, in partnership with NetSpend®

• Innovations over the years include: in-store card activation, charity card in partnership with The National Breast Cancer Foundation, no-fee cash withdrawals & in store service options

• 95% of ACE Elite™ customers would refer a friend or family member to the product*

*Based on the 2013 Survey of ACE Elite Cardholders

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National Foundation for Credit Counseling

• Nation’s largest financial counseling organization, the NFCC Member Agency Network includes more than 700 community-based offices located in all 50 states and Puerto Rico

• NFCC Member Agencies provide financial counseling and education to millions of consumers each year in person, over the phone or online

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2013 Consumer Financial Literacy Survey*

Conducted online by Harris Interactive on behalf of NFCC and NBPCA• 7th annual nationally representative survey of U.S. adults

(conducted by telephone in prior years)• Field period: March 4-6, 2013• Sample size: 2,037 U.S. adults ages 18+, including n=91** prepaid debit card users

Survey Topics included:• Budget, Spending & Savings• Getting Paid & Paying Bills• Credit Cards & Credit Reporting • Knowledge of Personal Finance• Financial Problems & Credit Counseling• Prepaid Debit Cards

7*Complete Survey Details http://www.nfcc.org/newsroom/FinancialLiteracy/files2013/NFCC_NBPCA_2013%20FinancialLiteracy_survey_datasheet_key%20findings_032913.pdf

**Caution: small base (n<100) – results should be interpreted as directional.

2013 Key Findings Highlights*• 2 in 5 U.S. adults – 40% – have a budget and keep close track of their spending• On a scale from A to F, only 18% of U.S. adults would give themselves an “A” on their

knowledge of personal finance

• 8% of U.S. adults – or nearly 19 million people – have used a prepaid debit card in the past 12 months

• 6% of U.S. adults – about 14 million people – say they typically use a prepaid debit card to pay for everyday transactions (“prepaid debit card users”)

• Those who regularly use prepaid debit cards do so primarily because they are convenient (59%) – only about 1 in 4 (24%) rely on prepaid debit cards because they lack other payment/banking options

• 81% of prepaid debit card users say they feel more in control of their money with a prepaid debit card, and more than 2 in 5 – 43% – strongly agree

• 71% wish their prepaid debit card offered the option to enroll in overdraft protection

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*Complete Survey Details http://www.nfcc.org/newsroom/FinancialLiteracy/files2013/NFCC_NBPCA_2013%20FinancialLiteracy_survey_datasheet_key%20findings_032913.pdf

National Council of La Raza (NCLR)• Largest national Hispanic civil rights and advocacy

organization in the U.S.

• Network of nearly 300 affiliated community-based organizations in 41 states, Puerto Rico, and the District of Colombia

• Applied research, policy analysis and advocacy in five key areas: Assets/investments, civil rights/immigration, education, employment and economic status, and health

• Capacity building assistance to Affiliates who work at the state and local level to advance opportunities for individuals and families

Alliance for Stabilizing Our Communities (ASOC)

• Partnership between NCLR, National Urban League (NUL), and National Coalition for Asian Pacific American Community Development (CAPACD)

• Three HUD-certified housing counseling intermediaries that work with a network of 95 local housing counseling agencies

• 2013 Financial Services Research Project: More than 5,000 AAPI, African-American, and Latino clients surveyed in 4 states– CAPACD: California (various cities); Chicago, IL; Houston, TX

– NUL: South Florida; Chicago, IL; Houston, TX

– NCLR: South Florida; Chicago, IL; El Paso, San Antonio, and Houston, TX

(also have a 2012 data set from various California cities)

– Full data set will be available in late July, with a report out in late Fall

Factors Influencing Where to Bank

Banking ServicesQ: What are the top 3 factors you consider when deciding or choosing where to do your banking or other financial transactions?

Tools for Financial TransactionsTool Total (%) Men (%) Women (%)

Cash 69 70 68

Debit card 52 48 55

Credit cards 35 35 34

Checks 9 9 9

EBT/public benefit 8 7 9

Gift cards 7 6 8

Prepaid cards 4 4 4

Other 1 1 1

N 5,376 2,142 3,225

Tools for Paying BillsTool Total (%) Men (%) Women (%)

Cash 45 47 43

Debit card 39 37 40

Internet 30 26 33

Check 28 26 29

Credit cards 22 24 21

Money order 11 13 10

Prepaid cards 3 3 3

Kiosk in store 2 1 2

Gift card 1 1 1

N 5,386 2,149 3,228

Mobile BankingTotal (%) Men (%) Women (%)

Yes, online 39 38 40

Yes, mobile 5 5 6

Yes, both 12 11 13

Neither 39 41 37

N 5,369 2,142 3,219

Direct Express® Prepaid Debit MasterCard®

• Offered by the U.S. Treasury through an agreement with Comerica Bank

• Meets Treasury’s requirement to make a low-cost account available to unbanked federal benefit recipients

• Key component of Treasury’s all Electronic effort

• Available for SSA, SSI, VA, Railroad Retirement, OPM annuities, Labor – Black Lung disabilities

• Over 3.5 million cardholders16

Consistently High Cardholder Satisfaction

• Satisfaction among those who signed up for the Direct Express® after May 1, 2011 is equally high• 93% of cardholders would recommend the Direct Express® card to a relative or friend

*Research conducted by KRC Research on behalf of Comerica Bank and MasterCard

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93

94

95

2009 2010 2011 2012

Customer Satisfaction(Percent Satisfied or Very Satisfied)

Percentage

Continuous Cardholder Education is Key

• Significant increase in awareness of text alerts and the ability to pay bills like utilities, by phone.

• Four in ten remain unaware of surcharge-free ATMs

• ATM withdrawals and purchases remain the most prevalent uses of the card, while paying bills by phone (now over half) and Internet purchases (now about three in 10) have increased significantly over the past two years

• Innovative financial literacy efforts drive behavior - PayPerks® -rewards based program

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Questions?

• Thank you for attending New Consumer Research, including the Role of Prepaid in Financial Literacy and Access

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