Prize-linked savings (PLS) is a proven, innovative, and engaging approach in which savers can earn chances to win prizes by making savings deposits. Commonwealth has been the leading voice for advancing the concept of PLS in the United States for over a decade. During that time, PLS has expanded in its reach and impact across products and geographies. There are more opportunities for PLS to continue to grow participation, drive business value for institutions, and help financially vulnerable people build savings, which is a critical step on the path to financial security.
This brief describes the state of the PLS market today and highlights opportunities for continued growth and innovation. The Prize-Linked Savings Market Today Since 2009, PLS products have driven more than $685 million in savings in over 287,000 accounts nationwide.1 Commonwealth has fielded consumer research, partnered in design, launch and promotion, and/or conducted evaluations of almost every available PLS solution. As of May 2018, there are 17 active PLS products in market, and more under development. Credit unions have been the standard bearer for PLS in the U.S., with a long history of individual institutions offering their own products as well as multiple “off-the-shelf” options—in which credit unions can offer products operated by a third party—now operating in 15 states. Since 2009, credit union members have opened over 82,000 PLS accounts and saved over $190 million.
The largest single PLS solution is a prepaid card: Prize Savings on the Walmart MoneyCard generated $600 million saved in over 200,000 accounts in its first year. Fintech companies are relatively new on the scene but are innovating with the widest range of features and user experiences. Banks have been slow to adopt PLS, but three community banks have taken the initiative to design and launch their own products.