This forecast report identifies key segments that will continue to witness a decline over the next few years as well as those that should see growth. The economy, politics, and consumer behavior will all influence which segments grow and which decline.
This report reviews and forecasts load dollar volume and card volume for both open-loop and closed-loop segments. This forecast highlights the segments approaching market saturation as well as those that will continue to experience double-digit annual growth.
"Events in 2016 will likely make it a watershed year for the prepaid industry, and the future of many segments will hinge on regulations. Prepaid providers should be evaluating their businesses and looking for ways to diversify," Ben Jackson, author of the report, comments.
Highlights of the report include:
- In this annual forecast report, it has taken a largely conservative approach to forecasting prepaid market growth due to the uncertain regulatory environment, the changes likely to come in an election year, and rapidly changing payments technology.
- This forecast assumes that the slow economic recovery will continue and that government benefit programs will continue to shrink, with the exception of Social Security.
- This industry forecasts that growth in the open-loop prepaid loads in the United States be 7% through 2018, reaching a total of $343 billion.
- Closed-loop prepaid loads will have a 3% CAGR through 2018, reaching a total of $371 billion.
- Based on the much larger total closed-loop market size, the open-loop market will not surpass the closed-loop market until beyond 2018, individual segments notwithstanding.
- The fastest growing segments are forecast to be the open-loop FSA/HSA Tax Deferred Programs segment, open-loop Money / Financial Services segment, and the closed-loop Digital Media segment.
- Campus cards show a potential for strong growth, but face regulatory pressures that may constrain the segment.
- Open-Loop Market Load Forecast
- Closed-Loop Market Load Forecast
3. Open-Loop Card Forecasts
4. Cash Access Category
- Open-Loop Travel Cards
- Money / Financial Services Cards
- Open-Loop Gift Cards
- Remittance and P2P
5. Business Time and Expense Category (Open-Loop)
- Open-Loop Events and Meetings
- Open-Loop Employee and Partner Incentives
- Open-Loop Consumer Incentives
6. Campus (Open-Loop)
- Open-Loop Campus Segment
7. In-Store Gift Cards Category (Open-Loop)
- Open-Loop In-Store Gift Cards
8. Government Category (Open-Loop)
- Social Security
- Open-Loop Temporary Assistance for Needy Families (TANF)
- Court-Ordered Payments
- State Unemployment
9. Insurance Category
- Insurance Cards
10. Payroll and Benefits Category
- Payroll Cards
- Open-Loop Benefits Cards
- FSA/HSA Cards