Walmart, Green Dot See Quick Adoption of Savings Program
In the face of approximately 67 million unbanked or underbanked U.S. adults, and 90 percent of households saving less than 2 percent of their disposable incomes, according to the Center for Financial Services Innovation and the Fed, respectively, Walmart and Green Dot are helping prepaid cardholders shore up their finances through a prize-based savings program.
Prize Savings, a savings incentive program available to Walmart MoneyCard cardholders, already is showing signs of improving financial behavior, according to the companies. Since the program’s launch in August, usage of the MoneyCard Vault savings feature has increased more than 130 percent, according to an announcement Dec. 15, and MoneyCard Vault users are saving an average of 35 percent more money than they had been. To participate, cardholders log onto the Walmart MoneyCard app or Website to transfer money from their Walmart MoneyCards to their “vault.” Each dollar saved is one entry in a monthly national drawing, in which 500 cash prizes are awarded, including a $1,000 grand prize.
“According to The Federal Reserve Board of Governors, nearly half of all U.S. families can’t cover a $400 emergency with their savings. That’s a reality we don’t want our customers to have to live with, and we thought we could help,” said Daniel Eckert, senior vice president, services, Walmart U.S.
The savings program provides consumers with an opportunity, and encouragement, to “build a safety net to protect themselves when they need some emergency funds and save for the future,” said Green Dot CEO Steve Streit.
Walmart and Green Dot partnered with Commonwealth, formerly known as D2D Fund, a national organization that creates prize-linked savings products and policies in the U.S. Sweepstakes-based programs have had success in driving financial education and loyalty—goals that can be elusive for prepaid providers. For example, the Treasury’s PayPerks—a Paybefore Award-winning financial literacy program, in which Direct Express offers cardholders rewards points when they participate in PayPerks online financial education modules.