Mercator Blog

Prepaid Bulletin - March 2016
Date: March 2, 2016
Research Team

As February draws to a close, I hope that you have enjoyed the extra day of this leap year. I am hoping that this extra day will give my research efforts a little more time to come to fruition. 

In my last letter, I mentioned three big efforts I am undertaking for 2016: sizing the retailer-issued gift card market, sizing and forecasting the U.S. prepaid card market, and sizing the open-loop market in Canada. 

Over the past few years, I have narrowed the focus of Mercator’s closed-loop benchmark to focus on retailer-issued cards for gifts, incentives, and store credits. The report also includes information on the distribution channels for these cards. This year, I am once again surveying retailers to find out about their markets. All respondents of the survey are kept confidential, and the data is only reported in aggregate. If you issue closed-loop cards, please consider filling out my survey, which can be found at the following link. The goal is to have all of the data collected by March 11. 

Closed-Loop Issuers Survey:

In addition, the survey includes a special research effort sponsored by the Retail Gift Card Association to explore the different ways in which retailers can measure incremental spending driven by gift cards. 

On the open-loop side of the market, my annual survey focuses on processors and becomes the basis of the annual prepaid forecast. As with the closed-loop survey, we keep all individual data confidential, and only report aggregate numbers. The survey will also accommodate issuers and program managers. If you issue, process, or manage prepaid programs, please consider contributing data to this year’s survey. It will be critical to have a good sense of the size and shape of the prepaid market for the regulatory battles to come later this year. 

Open-Loop Survey:

Third, the Canadian prepaid market is the subject of our next benchmarking effort. We are working with the Canadian Prepaid Providers Organization to size the open-loop market in Canada. Our survey is focused on issuers, because we have heard that this is best place to gather the information, but we are willing to talk with all members of the value chain about measuring the market. 

If you are a Canadian prepaid provider, please consider filling out the survey. It can be found at the following link.

Canadian Open-Loop Survey:

We are following the same rules as the U.S. survey in that we will not reveal any individual results, and we are calibrating our reporting to make sure that no individual results can be reversed engineered. This may result in a different segmentation in the Canadian market, but protecting the data of the respondents is a top priority. 

Even as this research is on-going we will continue to publish work as it is completed. Be on the lookout for a report on payroll cards that covers demographics of users, desires of employers, and some of the players in the market. That should be published in the next week or two.

Finally, last month I mentioned a report on the secondary gift card market. Since that note was published, I have heard from many of you in the industry. Based on those conversations, I am looking to do an update of that report. Research is always an on-going effort, and I welcome these conversations. They improve my research, which I hope helps you improve your business. So please get in touch with your thoughts about the industry.



Ben Jackson
Director of Prepaid Service
Direct Line 781.419.1706 | Fax 781.419.1701
Mercator Advisory Group
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Maynard, MA 01754 /