Reframing the benefits of a prepaid card savings wallet

Background

While specialty savings CDs offer additional incentives for saving for banked consumers, many individuals are either unbanked or underbanked. Prepaid cards offer a secure and convenient alternative or complement to a bank account without a credit check. However, prepaid cardholders rarely take advantage of the savings features that are included by some card providers.

To help understand if and how prepaid cards could help consumers save, we partnered with prepaid card provider Netspend. Compared to other prepaid card providers, Netspend offers their users the highest interest savings account at 5.00% APY for balances of $1,000 or less. We explored how we might encourage more of their cardholders to take advantage of the available savings features.

Key Insights

There are several findings from behavioral science that we thought would be relevant to encouraging more cardholders to take advantage of the savings features associated with their card:

• Reframing messaging to add intrigue or mystery can make it more motivating. For example, we previously tested whether reframing messaging about calling to lower your credit card payment to “A Secret Money Hack” and “The APR trick you’ll tell everyone.” Adding this kind of intrigue increased call rates from 3.8% to 5.22%.

• Framing saving as “earning money” is more appealing. Not only was the 5%-interest rate a standout feature, but we know from our prior research that a value proposition to ‘earn money’ can be more appealing than a value proposition to ‘save money.’

Experiment

We wondered if adding an element of secrecy to the Netspend messaging and reframing the savings features as opportunities to earn money would similarly entice cardholders to take action and save. Netspend targeted more than 45,00 cardholders who had previously opened a savings account but had a balance of $0. These individuals were randomly sent one of three emails. All of the email body copy was identical except for the one headline which highlighted the secrecy messaging to encourage individuals to save.

Results

There was no effect between conditions on open rates. However, the average open rates among the experiment’s conditions were 4-points greater– a 26% increase –than Netspend’s average open rates for this type of email.

We did see differences in click-through rates. Consistent with previous findings, the messaging “A Way to Earn Money” significantly outperformed the other two groups. People who opened the “intrigue” emails may have been expecting to see a ‘secret,’ only to be let down to discover it is a saving account. The earning frame was consistent between the subject and the body, which may be why it performed better.

Netspend also provided information on how many accounts had over a $5 balance after 60 days. While more people in the second condition had accounts with a balance, this was likely driven by people who would have saved regardless. When we look just at savings for people who opened the email, the differences go away.

We also found that 5.7% of people who opened the email started saving, compared to just over 4% of those who did not open the email and therefore may be unaffected by the experiment. Therefore, it’s possible that the email encouraged a few more people to start saving, but it could also be that the people who opened the email were more likely to save regardless of the email.

Overall, the findings reinforce the idea that email interventions are unlikely to drive significant uptake in prepaid card savings behavior. We would encourage future research to focus on interventions that integrate within the user experience. For example, we could imagine changing the sign-up flow to include a saving account setup or helping users make a saving allocation after their first deposit.