2010 Prepaid and Gift Card Market: Challenging Year Calls for New Growth Strategies
- ID: 1208926
- March 2010
- 35 Pages
- Javelin Strategy & Research
This will be a challenging year for the prepaid and gift card industry as new regulations cause a shift to more consumer friendly, less costly products. Consumer usage of combined gift and prepaid products fell by 5% in 2009 to 61%, as the U.S. entered its second year of recession. Indications from leading stakeholders suggest that the market has rebounded and will regain momentum in 2010 as products reposition with lower costs and better functionality. Additionally, industry consolidation will accelerate as the prepaid and gift market continues to mature and as regulation reduces fee income options for many providers.
- What are the key trends in prepaid and giftproduct transacting?
- Who uses prepaid and gift products and what demographic patterns are associated with users of each product?
- What market forces are influencing change in the prepaid and gift markets?
- How are the major card networks driving prepaid and gift business?
- What merchant and positioning strategies are proving effective in building demand for prepaid and gift vehicles?
- Are gift card users demographically similar to general purpose prepaid users?
The consumer data in this report is based on data collected online from:
- A random sample panel of 3,294 consumers collected in November 2009, with an overall margin of sampling error of ±1.71 percentage points at the 95% confidence level. The surveys targeted respondents based on representative proportions of gender, age, and income compared to the overall U.S. online population. Rounding (in the underlying numbers) in charts accounts for the slight differences in totals.
Prepaid and Gift – Establishing A Core Position
Prepaid/Gift Product Focus
Closed-Loop and Open-Loop Systems
Non-Reloadable and Reloadable Products
Selected Major Merchant Programs
H&R Block Bank
Market and Provider
Defining the Prepaid and Gift Card Markets: Who Uses These Products?
Prepaid Remains an Interim Step for Moving Unbanked/Underbanked Consumers to Financial Institutions
Prepaid User Demographics
Table of Figures:
Figure 1: Combined Consumer Use of Prepaid and/or Gift Cards, 2007-2009
Figure 2: Online Prepaid and Gift Card Purchase Volume and Share, 2009-2014
Figure 3: Western Union Home Page Marketing for Gift and Prepaid Options
Figure 4: Number of Walmart MoneyCenter Locations and Instructions for Loading Tax Refunds to a Walmart MoneyCard
Figure 5: Top U.S. Financial Institution Issuers of Prepaid Cards Based On 2008 Purchase Volume
Figure 6: Functional Specialties across the Prepaid and Gift Market
Figure 7: Zeevex Xtreme Online Gift Card FAQs
Figure 8: Consumer Use of Prepaid and Gift Cards: Overall, In-Store, Online or Bill Payment (Last 12 months)
Figure 9: Use of Common Financial Services Products: All Consumers, Prepaid, and Gift Card Users
Figure 10: Most Commonly Used In-Store Payment Method: All Consumers vs. Prepaid Users
Figure 11: Prepaid Use by the Underbanked vs. All Consumers
Figure 12: Prepaid or Payroll Card Users (Last 90 Days) by Age
Figure 13: Target Closed-Loop Gift Cards for Consumers and Businesses
Figure 14: Annual Incomes of Gift Card Users Compared to those of Prepaid or Payroll Card Users
Figure 15: Gift Card Use by Age
Figure 16: Prepaid or Payroll Card Users (Last 90 Days) by Income
Figure 17: Prepaid or Payroll Card Users (Last 90 Days) by Gender
Figure 18: Used Prepaid or Payroll Card (Last 90 Days) By Ethnicity
Figure 19: Gift Card Use (Last 90 Days) by Gender
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