Prepaid Loads Continue to Grow as Individual Segments of the U.S. Prepaid Cards Market Struggle

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New research from Mercator Advisory Group shows which segments of the closed-loop prepaid market will grow, and which will shrink through 2019.

One of the 18 figures from the 32-page report

The fundamental business proposition of prepaid cards as a valuable payments tool continues to be strong. Nonetheless, prepaid providers should be evaluating their businesses and looking for ways to diversify.

The report titled 13th Annual U.S. Prepaid Cards Market Forecasts, 2016–2019 provides an analysis of the growth and development of the prepaid cards industry through 2019. The report examines 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 undergo declining loads 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.

"The fundamental business proposition of prepaid cards as a valuable payments tool continues to be strong. Nonetheless, 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:

  • The results of the U.S. elections and the changes coming in the federal government could benefit some closed-loop prepaid segments and harm others, but a level of uncertainty remains for the industry.
  • Mercator Advisory Group has decided to count the TANF category differently this year and has dropped prepaid long distance from its coverage. The reasons for these changes are explained in more detail in the sections covering those respective segments.
  • Mercator Advisory Group forecasts that growth in the closed-loop prepaid loads in the United States will be 2% through 2018, reaching a total of $312 billion.
  • The Store Credits (Returns) will decline through 2019 as consumer shopping and payments behavior changes the way returns are handled.
  • Mercator Advisory Group forecasts slow growth across all segments, but several segments could see faster growth depending on macroeconomic factors.
  • Energy prices will affect the Petroleum and Utilities segments and could drive loads in those segments up or down.
  • Tolls and Transit loads will be influenced by infrastructure spend and gas prices as well.
  • Nutritional Assistance, Incentives, Benefits, and Campus card loads will be affected by government policy, including tax law changes, funding for programs, and general regulatory requirements.

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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Karen Yetter
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