Consumer Prepaid Distribution Strategies

New research shows the ways Closed-loop prepaid program
managers drive volume and program profitability

Boston , MA — For prepaid card program managers, distribution is top priority. New Mercator research, Consumer Prepaid Distribution Strategies, examines the methods available to prepaid card program managers as they seek out new outlets and markets.

The report focuses on how the closed-loop gift card business approaches distribution, given that retailers have led the way with in-store and online distribution channels. Understanding these channels will provide clues for prepaid card managers in all segments about how to find new outlets for their cards.

Helping to complete the distribution picture, the report also highlights some channels that have thus far been primarily used for open-loop cards.

Distribution plans must include both business and technological developments, and this report covers off on the current state of the digital card market. While these cards and channels will become increasingly important, until now, adoption has been slow.

Nonetheless, there is no distribution channel that the prepaid industry can afford to ignore.

“Due to thin margins, prepaid programs depend on volume for profitability. So, getting cards into many hands is critical to success,” Ben Jackson, senior analyst, Mercator Advisory Group’s Prepaid Advisory Service and author of the report comments. “Program managers, whether handling open-loop or closed-loop cards, have a variety of distribution options. Understanding those options requires a grasp of both business and technology considerations.”

Highlights of the report include:

The eight main distribution channels of consumer prepaid card issuers.

The distribution channels that have remained significant despite the changes the government mandated in the regulations implementing the CARD Act of 2009.

Findings from Mercator’s CustomerMonitor Survey regarding card buyer’s channel preferences.

The new ways technology advances offer to sell cards to customers and the trends of retailer and consumer adoption.

The business and technological considerations distribution plans need to factor into the mix.

One of seven exhibits in this report:


This report is 19 pages long and contains seven exhibits.

Companies Mentioned in this report include:, Blackhawk Networks, CoinStar, CSP, CVS, Gap, InComm, , iTunes, and Starbucks.

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.

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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