Outside Regulatory Forces Impact Prepaid Market


This report covers Mercator Advisory Group research and expectations on how economic and regulatory issues are affecting the prepaid card market.

Author: Jordan Hirschfield
Published on: December 16, 2022

In an uncertain economic environment, the payments industry will need to react to both micro and macro issues. Large-scale policy changes meant to fight inflation, deal with unemployment, and address other macro conditions will be the primary drivers of change in the prepaid market. Secondary drivers include broad and local efforts to curb money laundering and fraud as well as increases to saving products like Flexible Spending Accounts (FSA) and Health Savings Accounts (HSA).

Indirectly there are varying levels of regulation meant to create change in other payment verticals, primarily credit, that will have long-lasting changes in the prepaid market. Continued efforts to cap interchange fees could have secondary impact on loyalty programs, which drive large volumes of prepaid business as a secondary avenue for utilization of rewards. In addition, continued potential to regulate cryptocurrencies could benefit prepaid mechanisms that look to easily convert crypto to fiat currency at point of sale.

This report is 18 pages long and has 9 exhibits.

Companies mentioned in this report include: Mastercard, Binance, FTX, BlockFi

Key Questions discussed in this report:

  1. What does Mercator expect for direct regulatory changes in prepaid cards?
  2. How will economic conditions change policies that direct the prepaid market?
  3. What other payment regulations should the industry consider when analyzing prepaid services?


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