The Global Market for Prepaid Cards is Projected to Reach US$3.5 Trillion by 2024

Presence of a Large Pool of Unbanked and Underbanked Customers to Drive the Global Prepaid Cards Market, According to a New Report by Global Industry Analysts, Inc.

GIA launches comprehensive analysis of industry segments, trends, growth drivers, market size, share and demand forecasts on the global Prepaid Cards market. The global market for Prepaid Cards is projected to reach US$3.5 trillion by 2024, driven by the ease and convenience offered by these cards, growing application areas, and innovative feature additions and enrichment.

Prepaid cards are innovative non-cash financial vehicle for payments with stored value but with no link to an external account at a bank. With an advantage of filling existing gaps in the financial payment market left by debit and credit cards, and addressing the needs of underbanked and unbanked individuals, prepaid cards are witnessing rapid growth in demand across a wide variety of applications. Convenience and ease in obtaining them drives utility and adoption of these cards even among customers who have conventional banking products. Efficiency related to risk management, safety, flexibility and immediate liquidity in addition to low processing cost are inherent benefits of prepaid cards, which are expected to drive significant adoption of prepaid cards in various forms going forwards. Increase in the number of consumers preferring payment cards over traditional banking, entry of new brands, and pull back of free checking by banks for low balance consumers are some of the other factors driving adoption of prepaid cards and driving the gross dollar value.

General purpose reloadable (GPR) cards and gift cards are some of the most popular prepaid cards in use. Increasing shift towards gift cards away from gift vouchers among consumers, alongside their growing preference for core employee engagement and reward strategies in various business entities are driving demand for prepaid gift cards. Prepaid cards, in the form of Government Disbursement Cards and Payroll Cards, are seeing significant growth in adoption across various markets worldwide for disbursing wages, distributing benefits and making other payments, fostering their adoption. Increasing dependency of retailers on these cards to improve customer loyalty, brand awareness and increase footfalls, are also contributing to their growth. Shifting towards prepaid cards as ideal check and cash replacement tool for businesses and users in transit and meal vouchers is further fueling growth. Travel budgeting and security needs have elevated the importance of prepaid cards among banked users. Increasing popularity of e-commerce is another factor driving adoption of prepaid cards, particularly among the unbanked and underbanked customers such as students and even among consumers with traditional bank cards who seek to manage their expenditure.  

Typified by low entry barriers and heavy competition, the prepaid cards market is witnessing launch of several new products with a host of innovative features as players seek to expand the utility and appeal of prepaid cards. The market, however, faces several challenges that threaten to weaken future growth prospects, which include lack of transparency, scrutiny, disparity and standardization; growing use of prepaid cards by fraudsters and criminals; and increasing regulations. With measures such as implementation of EMV chips in prepaid cards sweeping across many markets, manufacturers tend to pass these extra costs to consumers thereby increasing the fee and in prices reducing their appeal. Besides, increasing number of banked consumers worldwide is also a growing threat to the prepaid cards market.   

As stated by the new market research report on Prepaid Cards, the U.S. represents the largest market worldwide. Higher relative popularity of prepaid cards, long exposure to these cards and presence in virtually every major sector, including government, enterprise, healthcare, transportation, marketing and others result in higher circulation and gross dollar value of prepaid cards. Despite the dominance of the U.S., prepaid cards are also garnering growing attention in other markets worldwide. Increasingly, governments, retailers, corporate enterprises and others outside the US are realizing the benefits of these cards in enhancing revenues and providing better customer service, driving its adoption. Latin America represents the fastest growing market worldwide, with a CAGR of 17% through the analysis period.

Major players in the market include AccountNow Inc., ACE Cash Express Inc., American Express Company, Blackhawk Network Inc., Caxton FX Limited, Edenred S.A., Green Dot Corporation, Kaiku Finance LLC, MasterCard Inc., MetaBank Inc., Mint Technology Corporation, The Bancorp Bank, The Western Union Company, Travelex Group Limited, Visa Inc., Wal-Mart Stores Inc. and WEX Inc., among others.

The research report titled “Prepaid Cards: A Global Strategic Business Report” announced by Global Industry Analysts Inc., provides a comprehensive review of market trends, issues, drivers, mergers, acquisitions and other strategic industry activities of global companies. The report provides market estimates and projections for Prepaid Cards in value terms for all major geographic markets such as United States, Canada, Japan, Europe (France, Germany, Italy, UK, Spain, Russia and Rest of Europe), Asia-Pacific (China, India and Rest of Asia-Pacific), Latin America (Brazil, Mexico and Rest of Latin America) and Rest of World. Product segments analyzed include Closed Loop and Open Loop prepaid cards.

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