Mercator Advisory Group’s Tenth
Annual U.S. Open-Loop Prepaid Cards Market Assessment and Prepaid Market
Overview is the first of the annual trilogy of closely followed prepaid
benchmark reports (Open-Loop, Closed-Loop, and Prepaid Market Forecast) that
provide a thorough analysis and documentation of the growth and development of
the prepaid industry. The report benchmarks the load, growth, and market
dynamics for open-loop prepaid products in 18 different market segments.
Mercator Advisory Group defines an open-loop
card as one that uses one of the major payment networks to complete
transactions. Examples include an open-loop gift card that can be used at any
store that accepts the brand on the card, or a card restricted to a particular
retailer that relies on an open-loop network to complete the transaction.
For several reasons that are identified in
this report, the total dollars loaded in the open-loop prepaid market grew by
only 6 percent to $194.5 billion year over year, a much smaller growth rate
Within the 19 open-loop prepaid market
segments tracked by this report, the Cash Access category, which includes
Travel cards, Open-Loop Gift cards, Open Money and Financial Services cards,
and Money Remittance/Person-to-Person cards, was the fastest growing, but even
so, it grew at a combined rate of only 12 percent, with a total load of $83
billion in 2012, up from $74.1 billion in 2011.
“Growth in the open-loop prepaid market has
been driven by the cash access and government categories, but the future growth
of the market could be hurt by excessive regulations,” says Tim
Sloane, Director of Mercator’s Prepaid Advisory Service and author of the
Highlights of the report include:
- Detail of dollars loaded onto prepaid open-loop cards across 18 segments.
- New data that shed additional light on government benefits cards and prepaid cash access cards.
-Information on the declining growth rates across all segments and the one segment where growth continued to increase.