(New York, NY) The rapid evolution of FinTech solutions continues to reshape consumer perceptions of banking, with stored value accounts (SVAs) emerging as a potential competitor to traditional banking accounts and cards. Auriemma Group’s latest issue of The Payments Reports uncovers positive sentiments around SVAs, underscoring their role in the financial ecosystem and raising questions about their long-term viability as a banking alternative.
SVAs offered by providers like PayPal and Venmo allow consumers to preload or receive funds and use them for a variety of transactions. Auriemma’s research shows that 61% of debit cardholders view SVAs as at least complementary to traditional banking, while 31% believe these accounts could replace at least some banking functions. Notably, 8% feel SVAs could entirely replace traditional banking services.
“Stored value accounts represent an important evolution in financial tools, but the collapse of Synapse underscores the risks of fintech intermediaries not covered by the FDIC,” says Jonathan O’Connor, Senior Manager of Research at Auriemma Group. “While stored value accounts offer benefits like lower fees and faster transactions, traditional banks deliver stability, security, and trust—advantages that consumers continue to value.”
What Can Traditional Banks Do?
SVAs are causing a modest stir among cardholders. Less than three-in-ten say they would be likely to use the option if offered by a FinTech provider. However, as SVAs grow in popularity, traditional banks can differentiate themselves by doubling down on their strengths and addressing evolving consumer needs. Auriemma’s research highlights several strategies banks can use to endear themselves to current and potential customers:
- Building Trust: Traditional banks should emphasize their strong track record of security—including FDIC backing—and fraud prevention. Providing clear, transparent policies and educating customers about safeguards can build trust that SVAs may not yet fully inspire.
- Enhanced Digital Experiences: Streamlining mobile and online banking interfaces can help banks compete with the tech-first approach of FinTechs. User-friendly apps with integrated budgeting tools, instant payments, and easy account management could make a significant difference.
- Personalized Financial Products: Banks can leverage their broad customer data to offer tailored financial products, such as personalized savings plans or rewards programs that align with individual spending habits.
- Bundled Offerings: By packaging SVAs with more traditional banking services—like high-yield savings accounts, credit cards, and loans—banks can create holistic financial solutions that FinTechs may struggle to match.
Opportunities for Growth
Most of those who have used a SVA with a FinTech provider say they would likely use more of that provider’s products, if available. This highlights the possibility of expansion SVAs create for those who use them. While largely benefiting FinTechs hoping to expand into other financial services, SVAs could also be a gateway for traditional banks hoping to deepen their relationship with new and existing customers.
“Traditional banks have the advantage of deep customer relationships, established financial stability, and the trust that comes with rigorous regulatory oversight. By leaning into these strengths and innovating alongside FinTechs, banks can remain central to their customers’ financial lives,” says O’Connor. “Our research shows that the future of banking will likely blend the reliability of traditional institutions with the agility and accessibility of modern FinTech solutions, creating a dynamic ecosystem that meets a diverse set of consumer needs.”
Survey Methodology
The Payments Report
This Auriemma Group study was conducted online within the US by an independent field service provider on behalf of Auriemma Group (Auriemma) in October 2024 among 804 adult debit cardholders. The number of interviews completed for both is sufficient to allow for statistical significance testing among sub-groups at the 95% confidence level ±5%, unless otherwise noted. The purpose of the research was not disclosed, nor did respondents know the criteria for qualifying.
(New York, NY) Cardholders consider many factors when applying for a new credit card, with those offering no annual fees and attractive rewards structures being the most influential. Auriemma Group’s latest issue of Cardbeat US confirms that offering compelling rewards significantly impacts cardholder decisions, with a clear preference for flat cashback structures over tiered options. The simplicity and predictability of flat cashback resonates strongly with today’s applicants.
When presented with two rewards card structures of roughly equal cashback value, 48% of credit cardholders prefer the flat cashback structure, while 43% lean toward the tiered structure. Although this difference may seem modest, it widens significantly when it comes to application likelihood. 70% of cardholders say they are likely to apply for a flat cashback card, compared to 58% who would apply for a tiered rewards card, if offered by a trusted issuer. These findings highlight the competitive edge of straightforward earning structures.
Cardholders also have high expectations of their credit cards, often looking for value that goes beyond standard offerings. Auriemma’s research found that while a 2.5% flat cashback rate is not common and typically comes with various conditions, many cardholders perceive this level of return as being in line with today’s industry standards. This expectation underscores the challenge for issuers to balance generous rewards with sustainable program structures, especially as preferences vary by demographic.
For instance, issuers aiming to attract Gen Z may find that tiered rewards structures hold unique appeal. This cohort shows a slight preference for tiered rewards, suggesting they may appreciate the potential for optimized earnings that this model offers. By aligning rewards with Gen Z’s preferences, issuers may improve acquisition among younger cardholders.
“While there are reasons to gravitate toward one rewards product over another, flat rewards require little work and mental math on the part of the cardholder,” says Jaclyn Holmes, Director of Research at Auriemma Group. “This makes it the smart option for those who don’t want to give their credit cards much thought, enabling more seamless and stress-free spending experiences.”
Flat rewards structures also hold a distinct advantage in day-to-day usage, with 46% of rewards cardholders reporting that their most frequently used card offers flat cashback. This shows that ease and versatility may make flat cashback cards the popular choice across spending categories, contributing to top-of-wallet status.
Flat cashback cards provide an accessible, simple way to earn, appealing to mass consumers and driving spending across various merchants. Issuers may find that a straightforward rewards model fosters ongoing card usage, as cardholders don’t need to track changing categories to maximize their rewards.
“Flat rewards offer a win-win for both cardholders and issuers,” says Holmes. “Cardholders can enjoy the effortlessness of earning, while issuers benefit from increased acquisition and engagement. As the credit card landscape evolves, prioritizing simplicity in rewards can be a powerful differentiator.”
Survey Methodology
Cardbeat US
This Auriemma Group study was conducted online within the US by an independent field service provider on behalf of Auriemma Group (Auriemma) in September 2024 among 801 adult credit cardholders. The number of interviews completed for both is sufficient to allow for statistical significance testing among sub-groups at the 95% confidence level ±5%, unless otherwise noted. The purpose of the research was not disclosed, nor did respondents know the criteria for qualifying.