Prepaid Loads Continue to Grow as Individual Segments Struggle

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New research from Mercator Advisory Group shows which segments of the prepaid cards market will grow and which will shrink through 2018

One of the 41 figures from the 58-page report

Events in 2016 will likely make it a watershed year for the prepaid industry, and the future of many segments will hinge on regulations. Prepaid providers should be evaluating their businesses and looking for ways to diversify.

The latest research report from Mercator Advisory Group, provides an analysis of the growth and development of the prepaid cards industry through 2018. The report, 12th Annual U.S. Prepaid Cards Market Forecasts, 2015–2018, overviews load, growth, and market dynamics in the United States across all prepaid segments.

Mercator Advisory Group’s forecast report identifies key segments that will continue to witness a decline over the next few years as well as those that should see growth. The economy, politics, and consumer behavior will all influence which segments grow and which decline.

This report reviews and forecasts load dollar volume and card volume for both open-loop and closed-loop segments. This forecast highlights the segments approaching market saturation as well as those that will continue to experience double-digit annual growth.

"Events in 2016 will likely make it a watershed year for the prepaid industry, and the future of many segments will hinge on regulations. Prepaid providers should be evaluating their businesses and looking for ways to diversify," Ben Jackson, director of Mercator Advisory Group's Prepaid Advisory Service, and author of the report, comments.

Highlights of the report include:

  • In this annual forecast report, Mercator Advisory Group has taken a largely conservative approach to forecasting prepaid market growth due to the uncertain regulatory environment, the changes likely to come in an election year, and rapidly changing payments technology.
  • This forecast assumes that the slow economic recovery will continue and that government benefit programs will continue to shrink, with the exception of Social Security.
  • Mercator Advisory Group forecasts that growth in the open-loop prepaid loads in the United States be 7% through 2018, reaching a total of $343 billion.
  • Closed-loop prepaid loads will have a 3% CAGR through 2018, reaching a total of $371 billion.
  • Based on the much larger total closed-loop market size, the open-loop market will not surpass the closed-loop market until beyond 2018, individual segments notwithstanding.
  • The fastest growing segments are forecast to be the open-loop FSA/HSA Tax Deferred Programs segment, open-loop Money / Financial Services segment, and the closed-loop Digital Media segment.
  • Campus cards show a potential for strong growth, but face regulatory pressures that may constrain the segment.

Members of Mercator Advisory Group's Prepaid Advisory Service have access to this report as well as the upcoming research for the year ahead, presentations, analyst access, and other membership benefits.

Please visit us online at http://www.mercatoradvisorygroup.com.

For more information and media inquiries, please call Mercator Advisory Group's main line: (781) 419-1700, send email to media(at)mercatoradvisorygroup(dot)com.

For free industry news, opinions, research, company information and more visit us at http://www.PaymentsJournal.com.

Follow us on Twitter @ http://twitter.com/MercatorAdvisor.

About Mercator Advisory Group
Mercator Advisory Group is the leading independent research and advisory services firm exclusively focused on the payments and banking industries. We deliver pragmatic and timely research and advice designed to help our clients uncover the most lucrative opportunities to maximize revenue growth and contain costs. Our clients range from the world's largest payment issuers, acquirers, processors, merchants and associations to leading technology providers and investors. Mercator Advisory Group is also the publisher of the online payments and banking news and information portal PaymentsJournal.com.

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