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New Report from Aite Group
Prepaid Cards: A Market Overview
Prepaid debit and stored value card transactions will amount to about
US$257 billion transactions by 2009, up from US$63 billion in 2004 in
the U.S. By 2009, prepaid processors will generate US$1.8 billion in
revenues, up from nearly US$0.5 billion in 2005.
Boston, MA, September 13, 2005 - In a 112-page report, Prepaid Cards: A
Market Overview, Aite Group examines the uptake of prepaid debit cards
(open loop) and stored value cards (closed loop) in the U.S. The report
reviews the market opportunity offered by prepaid cards, the regulatory
framework, the competitive landscape of processors and non-bank
marketers, and also profiles 15 notable competitors.
Prepaid debit cards are emerging as a new segment of the bankcard
industry. “While they are a testimony to the
relevance of the business model of the bankcard industry, prepaid debit
cards also testify to the growing importance of non-banks in the
development of new payment products,” remarks Gwenn Bézard,
a research director with Aite Group and co-author of the report.
Prepaid debit card (or open loop prepaid card) transactions will amount
to about US$150 by 2009, up from US$12.8 billion in 2004.
The prepaid market represents a fast-growing market opportunity for
processors. Closed and open loop prepaid processors will generate about
US$1.8 billion in revenues by 2009, up from about US$0.5 billion in
2005. By 2009, prepaid processing will be as large an industry as the
debit card and ATM processing industry was in 2004. "In coming years,
sheer size and rapid growth will place the prepaid market at the
forefront of the competition among card processors," adds
Bézard. The report predicts that, over the coming years,
card networks will continue to struggle to accommodate the unique
requirements of prepaid debit cards, creating opportunities for
third-party processors to innovate on top of the network utility.
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Overview