New Research Report Examines Growth of Open-Loop Prepaid Card Market
Boston, MA. - September 3, 2009 -- Despite a poor fourth quarter that began to feel the impact of today's recession, the growth of the prepaid industry in 2008 continued to show great vitality. When the prepaid market is evaluated on a segment-by-segment basis, it becomes clear that there are far more markets that are expanding or thriving in this economy than there are segments experiencing negative growth.
The 6th Annual Network Branded Prepaid Market Assessment is the first of our annual trilogy of closely followed prepaid benchmark reports (Open, Closed, Forecast) that provide a thorough analysis and documentation of the growth and development of the Prepaid Industry. It benchmarks the spending, growth, and market dynamics for all Network Branded Prepaid Solutions. This includes a review of the dollars loaded on Network Branded Prepaid products in 22 different market segments.
"Mercator Advisory Group believes the prepaid industry will continue to show growth in 2009. However, being in the right channel with the right product is becoming critical to the growth of prepaid products and represents a significant volume opportunity for issuers," Tim Sloane, Vice President of Client Services and Director of Mercator Advisory Group's Prepaid Advisory Service and author of the report comments. "It is clear to Mercator that no other payments market is riding out the current economic downturn as effectively as prepaid and I can't think on any better payments market to be in during a recession."
The 6th Annual Network Branded Prepaid Market Assessment also includes a special section on the utilization of Restricted Authorization Network (RAN) technology. In conducting our surveys, Mercator discovered an increasing use of the technology to enhance card programs. RAN is typically used to create an infrastructure that lowers costs and delivers added revenue to prepaid programs by steering consumers to specific merchants.
Highlights of the report include:
- The total load for all 33 prepaid segments in 2008 (Open & Closed) was $247.7 billion, a $27.8 billion increase over the $220.27 billion load in 2007 - an increase of 12.4 percent.
- Network Branded solutions had $60.42 billion loaded in 2008, an increase of 48.6% increase from the previous year.
- Open Loop gift cards continue to penetrate the sale of Closed Loop gift cards. The 2008 shake-up of the retail industry provided added traction for this segment, which saw a 54.3 percent increase.
- Social Security, now out of the pilot phase and being fully rolled out, hit $1.48 billion in loads in 2008, making it a significant new government program.
- Despite continued challenges to get consumers to reload the products, the Money & Financial Services (GPR) segment continues to show solid growth with more companies moving away from bare bone products to more sophisticated offerings that include features such as lines of credit.