As the ranks of young Americans, driven by economic forces, shun banks and credit unions in favor of alternative financial services providers (like check cashing and prepaid card programs), they create a deep impact on the existing financial services marketplace. If finanial institutions fail to respond to these changes, they could find themselves at a serious disadvantage.

Checking accounts, for example, are no longer the sign of status they once were. For many Americans today (rich and poor, working and unemployed) reloadable prepaid debit cards work just fine. This is especially true for the 80 million known as “Millennials.” Those consumers born between 1980 and 2000,Millennials grew up on the Internet, mobile phones and prepaid cards. The consulting firm Aite reports that 45% of all Americans who have opted out of traditional banking relationships are Millennials.

Many unbanked consumers are what Aite calls “debanked,” they’ve recently left financial institutions and opted to use prepaid cards instead of checking accounts. Still others are unemployed or under-employed and prefer reloadable prepaid debit cards because they make good budgeting tools.

Think Finance reports that among those Millennials it surveyed last year, 51% had used prepaid cards in the previous 12 months; this was the case both at the highest and the lowest income levels. Check cashing services are also popular with this demographic, the company said.

Demonstrating the broad socio-economic appeal of reloadable prepaid debit, American Express and Walmart support a joint offering – the Bluebird prepaid debit card – which has attracted over 575,000 customers in just six months.

As extensive as prepaid debit card adoption is, it’s understandable that some commentators would liken the cards to checking accounts. As standalone products, however, prepaid cards lack some of the functionality that checking accounts provide. That is until you add mobile and RDC technologies to the mix.

Mobile banking has a particularly strong appeal for Millenials. Among those with bank accounts, 33% are more likely to use mobile banking features than other age groups, and 8% are more likely to use remote deposit capture, according to a report by Diebold.

In fact, the growing popularity of “smart” mobile devices (nearly 60% of all mobile phones are smartphones), has had a huge impact on consumer banking. According to the latest data from the Federal Reserve Board, 28% of mobile phone owners used mobile banking applications in 2012, with 21% of those folks depositing checks by mobile (double the rate recorded in 2011). Even more telling, the Fed said 49% of under-banked Americans used mobile banking services last year, primarily to check account balances and pay bills.

Surveys of the un/under and de-banked indicate that many are turned off by high bank fees and onerous check hold rules, plus traditional bank hours just don’t fit their lifestyles.

That’s a sentiment that resonates with Chexar, a leading check guarantor company. Chexar uses Cachet’s RDC solution to support a “good funds network” for consumers so they can cash checks by snapping pictures of those checks using their mobile devices and have the funds deposited directly to their prepaid cards instantly, for a fee.

With over $184 billion in loads in 2011 and double-digit growth rates projected for the foreseeable future, reloadable prepaid debit cards are simply too big a market for banks and credit unions to ignore. Reloadable prepaid cards are an alternative account appealing to millions of Americans, and by making it easy to fund prepaid cards with checks using RDC, FIs are better positioned to respond to this growing demand and maintain a competitive advantage.