Payday and unsecured installment loans are not new to the lending space, and continue to attract upwards of 12 million Americans annually seeking loans, check cashing and more, with the loans typically geared towards low income (under 40K per annum) as well as unbanked individuals/families. While payday loans are often expected to be used for those “unexpected financial emergencies,” more than 41% of users stated that they used PayDay loans for expected expenses such as rent, utilities and more. And with payday loans typically dispersed with cash, it does little to assist with financial literacy/management for the nearly 25% of american households that are unbanked. So, with the rapidly evolving lending space looking for innovative and seamless customer experiences, how can payday and unsecured installment lenders innovate and improve upon their offering while continuing to serve their largest customer base?
Instantly Issue Prepaid Cards On The Spot
Prepaid cards offer payday lenders innovative new issuance capabilities, while eliminating risk of holding large amounts of cash on hand. Lenders can build custom branded cards that have no funds on them until issued and activated. Via an instant issuance platform, staff take a blank card, enter the card details and recipient information into the platform, add approved dollar amount and issue cards on the spot in real time. Cards can also be configured to only load funds once the recipient has gone online and activated the card, further securing the transfer of funds.
This significantly reduces the risk of not only security and threats of robbery, but internal theft as well. With easy-to-use inventory management, lenders can better track card locations, usage, disbursements and collections. Now that we’ve addressed how payday lenders can innovate their processes and issuance, let’s address how prepaid cards can better improve the user experience and provide financial management tools for the unbanked.
Online Customer Card Portals Help Manage Funds
With instantly issued prepaid cards, payday lenders offer users a tool to manage the loan and track spending without having to meticulously collect receipts. With the unbanked, cash flow management can be tracked in a customer portal that functions similar to online banking with transaction details, user profiles and funds management. These portals also come with customer support, fraud protection and more to ensure a recipients funds don’t go unaccounted for. With innovation being at the forefront of the lending space, payday lenders need to adapt to the growing demands of not only the industry but their customers as well.