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Sixth Annual Network Branded Prepaid
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.
This year's network branded report is unique because Mercator received data from our benchmark surveys and interviews with processors and issuers that represent a majority of the Open Loop market. The additional information we gained provided greater transparency regarding the development of the market and also enabled more accurate estimation of market size data at the segment level. This permitted Mercator to adjust its historical data to better reflect the robust growth of the open prepaid marketplace. These adjustments provide the fairest and most accurate possible assessment of the scale of the Open Loop market and support our continued goal of delivering to Mercator Advisory Group members the only consistent data set that measures the growth and dynamics of the prepaid industry.
"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.
An Exhibit included in this report:
This report contains 29 pages and 13 exhibits.
Segments Covered: Travel, Open Money/Financial Services (GPR), Open Gift Cards, Money Remittance / P2P, Business Travel, Events & Meetings, Employee & Partner Incentives, Consumer Incentives, Relocation Card, Campus, In-Store Gift Cards, Distributed In-Store Gift Cards, TANF, Court Ordered Payments, Transit (Tolls & Light Rail), State Unemployment, Insurance, Payroll, Benefits, FSA/HSA Tax Deferred Programs, Purchasing, and Social Security
Members of Mercator Advisory Group have access to these reports as well as the upcoming research for the year ahead, presentations, analyst access and other membership benefits. Please visit us online at www.mercatoradvisorygroup.com.
For more information, please call Mercator Advisory Group's main line: 781-419-1700 or send email to firstname.lastname@example.org.
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.