Prepaid Distribution Opportunities

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This report from Mercator Advisory Group, "Measuring Prepaid Mall Penetration and Analyzing the Adoption of Four Prepaid Distribution Models" indicates that 45% of all prepaid cards are sold through the Direct to Consumer business model and that Prepaid Mall Distributors represent an ever increasing percent of this volume - representing a business entity that has grown very rapidly in both dollar volume and in its importance to the prepaid industry.

Prepaid Distribution Opportunities - New Research Report by Mercator Advisory Group

This report from Mercator Advisory Group, "Measuring Prepaid Mall Penetration and Analyzing the Adoption of Four Prepaid Distribution Models" indicates that 45% of all prepaid cards are sold through the Direct to Consumer business model and that Prepaid Mall Distributors represent an ever increasing percent of this volume - representing a business entity that has grown very rapidly in both dollar volume and in its importance to the prepaid industry.

This report is the first in-depth look at prepaid card distribution models and according to Tim Sloane, Director of the Debit Advisory Service for the Mercator Advisory Group and the author of this report; "Despite the incredibly rapid growth of Gift Cards and the impact these cards have had on consumer spending and behavior, little was known regarding the overall market size for Prepaid Malls, the relative position of the major Prepaid Mall Distributors, or the vectors by which the Prepaid Mall Market will expand. This report answers those questions and established the methodology that will enable Mercator Advisory Group to benchmark the four different distribution models across all Prepaid Card Products."

Highlights of this report include:

  • Analysis of the 2006 Annual Prepaid Benchmark indicates that the Direct to Consumer (45%) and Government to Consumer (32%) business models are most popular while Business to Employee, Business to Consumer, and Business to Businessmodels combined account for only 23% of the total dollars loaded on prepaid cards.
  • There are four Distribution Models used to deploy Prepaid Cards that Mercator Advisory Group will measure in future research, they are: Issuer Direct To Consumer, Issuer Indirect Through Volume Merchants/Retailers, Issuer Indirect Through Corporate Partners, Issuer Indirect Via Distributors.
  • Issuers Indirect Via Distributors have very rapidly emerged as a critical distribution mechanism, currently servicing 261,000 merchant locations.
  • Despite this large number of merchants supported by Prepaid Mall Distributors, 26% of the market remains untapped.
  • More important than the untapped market is the fact that Mercator Advisory Group estimates that Prepaid Distributors can increase the revenue derived from current merchant locations by as much as 30-40 percent by improving category management and working with existing merchants to improve merchandising.

Members of Mercator Advisory Group have access to these reports, the spread sheet that contains the base data, as well as the upcoming research for the year ahead, presentations, analyst access and other memberships benefits. Please visit us online at http://www.mercatoradvisorygroup.com/.

For more information, please call Mercator Advisory Group's main line: 781-419-1700 or send email to info@mercatoradvisorygroup.com.

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ROBERT MISASI
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