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Dubit believe that only through a deep understanding of young

people, and keeping close to the audience throughout the strategic

and creative process, can real connections and respect be

achieved.

Through its extensive youth networks that it has built up over ten

years, Dubit provides clients direct access to youth audiences, and

an integrated approach that keeps young people at the heart of the

creative process.

In 2010, we now have 40 professionals across three departments,

who share the identical ethos of ensuring that young people are

understood, involved and entertained by the insight and projects we

deliver:

Research with over 37,000 young people, plus schools & families

Marketing & branding expertise; street & viral techniques

Interactive online worlds, games & learning environments

Pre-paid cards Usage13 -17 years oldsApril 2010

Heritage in youth insightDubit is the leading youth communications company in the UK

We understand the issues surrounding young people in the commercial world, because we’ve experienced it first hand. We research it, create resources for

it, and take our role seriously.

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Details of ResearchDubit Limited ran an online survey over the

18th to the 24th of March 2010.

The survey was emailed to the Dubit

Informer panel. We achieved a nationally

representative sample of 1,000

respondents aged 13-17 years old.

The survey was ten minutes long and

covered the following topics:

• Current sources of income:

• Pocket money

• Salaries

• Pre-paid cards:

• Awareness

• Usage

• Attitudes

• Future intention

• Shopping behaviour:

• Purchases

• Online behaviour

• Researching purchases

• Attitudes towards carrying cash

Research FindingsThis report provides information into awareness and

usage of pre-paid bank cards in the UK amongst 13-17

year olds.

Key HeadlinesEntering an established banking market has been a challenge for pre-paid

cards in terms of generating awareness and engendering itself to the right

consumer base and their needs. At the end of the first quarter of 2010 the

following report scopes the 3.276m* 13-17 year olds in the UK:

42% are aware of pre-paid cards

10% own one or more pre-paid cards

2% receive their pocket money onto their pre-paid card...

...and 1% receive their salary onto their pre-paid card

9% top-up their pay-as-you-go phones via their pre-paid cards

Of those who don’t have a pre-paid card, 73% would consider one after having it described to them

*data from ONS mid-2006 census

Pre-paid cards awareness

Awareness of pre-paid cards (1,000 base)

14, 15 and 16 year olds demonstrated the same level of awareness of

pre-paid cards. 17 years olds exhibited the highest level of awareness,

which you may expect given a greater exposure period.

Pre-paid Cards in the UKIn the last ten years pre-paid cards have really taken off in the US; it is now a growing market in UK consumer finance

Key selling points are that you don’t need to have a credit check and that you can control spend whilst avoiding any risk of debt

The flexibility and control elements are also ideal for students

traveling or people on Gap Years; they have become a natural extension to the 13-17 year old target market

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Uptake of pre-paid cards (438 base - only those aware)

Despite higher levels of awareness amongst males and 17 year olds this

does not convert into higher levels in terms of uptake. Often with

teenagers we find that high levels of awareness converts into intention,

with tightly targeted campaigns and the power of peer to peer

recommendations.

In the case of pre-paid cards, the role of the parent and the nature of the

product suggests that it is a needs based decision, rather than an

emotional purchase. Uptake is diluted amongst 17 year olds as they have

more financial options open to them in terms of personal current accounts.

8 in 10 who own a pre-paid card are single card users, however there are

a minority, predominately males, who own multiple pre-paid cards.

Pre-paid card application (110 base - those who own a card)

43% 39% 25%

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Brand awareness and usage (1,000 base)

O2 Load and Go card holds a significant presence within the market place

in terms of awareness and usage. Its unique position of being available to

O2 customers only, and with the success of the brand as a whole in

optimising their existing customer base, has led to it being the most well

known. Successful marketing campaigns such as its ‘Soap within a soap’

Hollyoaks campaign has cemented its position on the tip of teenage

tongues.

Current card options

O2 Load and Go Card

Exclusively for O2 customers,

the card lends on existing

relations providing free

subscription and usage. Can ‘load’ up to £1,800

per annum at Paypoints and O2 stores. It can

be used abroad (2.75% charge) and for topping

up mobile phone balances. Includes safety

features such as restrictions on over 18 product

purchases.

Virgin Prepaid

Comes with a £9.95 initial

subscription fee (£4.95 for

second cards) and has fees

depending on tariff chosen. The pay-as-you-go

tariff has a 2.95% fee per transaction whilst the

pay monthly has a £4.95 monthly fee plus a

£1.50 charge for each cash withdrawal. The

card offers Virgin rewards such as Holidays,

Experiences and Gym memberships.

Payzone

Can load up to £350 in one

deposit which is instantly

accessible. There is a fee for

loading (£3.95 or £6.95 depending on amount

loaded), a 1.95% fee per purchase or £1.50 per

ATM withdrawal. It also holds an inactivity

charge of £2 for every month not used after 2

months of non-use. Can be used worldwide at

Payzone’s 5,000 cash points.

Neon

A Phones 4U product with a

£9.95 subscription fee and

then no charges for usage. It

has a £500 limit and comes with a number of

bonus features such as discounts a play.com,

napster and ticketmaster.com

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Current Usage

Usage of pre-paid cards (110 base - those who own a card)

53%

45%

32% 32% 30%

19%

12%

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Small purchases

Large purchases that

you save up for

To top up my phone

Gifts (i.e. for someone else)

Purchasing everyday items

Emergency funds

Other

Females are more likely thank males to use the card for multiple reasons

however, on the whole pre-paid cards provide the ability to make a

number of different types of purchases.

Pocket money

77% of all teenagers are receiving pocket money, a % which decreases

with age as employment increases, but otherwise shows no significant

differences across gender, ethnicity or location.

68% receive their pocket money in cash, with 38% having some of their

pocket money paid into their bank account. These remain the main

channels, however 2% receive pocket money directly onto their pre-paid

cards, with 5% of 13-14 year old males receiving onto a pre-paid card.

Salary

38% are in some kind of employment, predominately part time or casual.

Again, cash and bank accounts are the main payment channels with only

1% paid directly onto a pre-paid card.

Those in employment tend to be older, and therefore more likely to have a

bank account. Very few contracted roles currently pay into pre-paid cards.

Mobile Phones

Of the interviewed 99% own mobile phones:

Mobile phone ownership (995 base)

60% 63% 56%

79% 69%

55% 49% 47%

40% 37% 44%

21% 31%

45% 51% 53%

Total Male Female 13 14 15 16 17

Contract

Pay as you Go

Nearly all of those who own a pre-paid card use it to top-up their pay-as-

you-go phone. This is supported by the large number of those with the

Load and Go O2 card, which has to an extent defined the growth within

the market place.

The Half Roundhouse

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T: 0113-3947920

E: ian.douthwaite@dubitlimited.com

Purchase behaviour

Shopping Online

How do you shop online (1,000 base)

A majority are either using the internet to browse

for cheapest products or research products

before going to a store to make the purchase.

However around a third are becoming more

engaged with making purchases online because

of the ability to search for a specific product,

achieve the most affordable price or make

impulsive purchases.

Making a purchase

Most still use high street stores to make

purchases, however online usage is prevalent

especially with males.

Where do you make your purchase (1,000 base)

2%

3%

10%

41%

53%

55%

86%

TV shopping channels

Other

Magazine catalogues

Online (catalogue)

Online (retailer direct)

Online (other)

In high street stores

Favorite products

Females show preference for purchasing

products that can require an element of touch or

feel such as clothes, shoes and accessories.

This does not necessarily indicate high-street

purchasing but certainly means that the store

nearly always plays some role in the purchase

journey.

Males are more inclined towards purchasing

CD’s, DVD’s and computer games and as such

online is a more influential channel.

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Topping up pay-as-you-go phone (588 base)

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Future Intentions

In a relatively new market place there are high levels of intention

amongst those who currently do not use, or are not aware of

pre-paid cards. Once the purpose and benefits of a pre-paid

card had been clarified there was positive levels of intention to

apply.

Consideration of those who currently don’t own card (902 base)

73% 66%

79% 78% 81% 79% 69%

57%

27% 34%

21% 22% 19% 21% 31%

43%

Total Male Female 13 14 15 16 17

Won’t

consider

Consider

There are a number of barriers to consideration and uptake

which can be roughly categorised into more permanent barriers

such as competing with bank cards required for 17 year olds in

employment and reasons which could be influenced through

improving communication and education of benefits.

What’s the point when I can

get a debit card which works

the same except prepaid cars actually charge for using

it, and topping up

Too expensive to

use...however looking at the

O2 version as free to me as I recently switched mobile

network

Parents don’t know

about them so would

not understand how they work

I thought it was only available

in certain places for public

transport e.g. London Oyster Card

I’ve wanted one but

am definitely not

prepared to pay a setup fee

Where would you expect to see advertisements (1,000 base)

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Mass media are the key channels for raising awareness of pre-

paid cards and communicating the benefits. With females and

13-14 year olds showing the most positive future intentions,

magazines and television are key.

Outdoor adverts are more popular in densely populated

environments such as London, however it is important to avoid

confusion with Oyster Cards when advertising near public

transport.

Other channels include social networks, especially Facebook

with some mentions of Spotify as it targets a very relevant

audience.

Pre-paid cards have relevance with an often frustrated audience

when it comes to money:

• 9 in 10 have in the past not been able to make a purchase

that they really wanted to

• This includes clothes, fashion, dresses and shoes for the

females. The males also include clothes but also lead to

game consoles, the games and technology

• 67% want more control over their money, with this number

greater for those under 17 and without any form of

employment

• Perhaps more important is the need to provide a safe

alternative with:

• a third having lost their wallet in the past

• 7% having mugged in the past, a % that significantly

rises in London and the Midlands and most alarmingly

amongst Asians that we spoke with, where 21% had

been mugged in the past.