The report examines loads, growth potential, and market dynamics in the United States across all open-loop prepaid segments.
This report reviews and forecasts load dollar volume for open-loop segments. This forecast highlights the segments approaching market saturation as well as those that will continue to experience double-digit annual growth. As the report’s author points out, the economy, politics, and consumer behavior will all influence which segments grow and which decline.
"Prepaid providers should be evaluating their businesses and looking for ways to move as many costs as possible to variable," the author of the report comments. “Opportunities in the prepaid market shift with economic and regulatory changes causing segments to shift in volume from year to year. Because of these shifts, successful program managers will seek to achieve a variable cost structure to take advantage of the ups and the downs. They should also explore new technologies such as the Internet of Things, and new use cases such as corporate disbursements, small business GPR cards, or insurance and health care claims which may provide growth markets in the years to come.”
- Growth returned to the Money/Financial Services segment after a slow down in 2016.
- Health Savings Accounts (HSAs) are up consecutive years with double-digit growth
- The payroll segment is forecasted to have an 8% cumulative annual growth rate (CAGR) through 2021.
- The Unemployment and TANF segments declined nearly double digits: -9% and-11% CAGRs, respectively.
Introduction Open-Loop Market Load Forecast
Cash Access Category
Open-Loop Travel Cards
Money / Financial Services Cards
Open-Loop Gift Cards
Remittance and P2P
Business Time and Expense Category
Open-Loop Events and Meetings
Open-Loop Employee and Partner Incentives
Open-Loop Consumer Incentives
Open-Loop Campus Segment
In-Store Gift Cards Category (Open-Loop)
In-Store Gift Cards
Government Category (Open-Loop)
Open-Loop Temporary Assistance for Needy Families (TANF)
Payroll and Benefits Category
Open-Loop Benefits Cards
Predicting the future is always dicey. This research has attempted to balance all the forces that are affecting the prepaid market to produce a picture of the prepaid industry’s future. This report provides a four-year forecast (to 2021) as well as a market estimate of the dollars loaded on open-loop prepaid debit card programs in the U.S. market in 2017. We do separate forecasts for the open-loop and the closed-loop prepaid markets because the audiences are different for the two categories of prepaid. Figure 1 presents the taxonomy of prepaid cards.
This forecast is derived from market knowledge gained through research done since 2004. However, even this archive of more than a decade of historical data provides little guidance on the future of markets that are growing rapidly and facing disruptive technology and services as well as historic new regulatory constraints. These factors, combined with dependence on funding sources tightly coupled to the economy and consumer sentiment, mean that the prepaid market is volatile and variable from one segment to another. Add a robust economy, a potentially rising interest rate environment, and new regulations to start April 1, 2019, and it is easy to see how segments may face dramatic shifts in 2018 and beyond.
Note that our charts for segments that have a large dollar load measure the total load in billions of dollars while charts for segments with small dollar load measure the total in millions so that year-over-year variances remain discernible. This year’s report shows a decade of numbers, but we have data going back to 2003.
- American Express
- Farmers Insurance
- Green Dot
- H&R Block
- Liberty Mutual
- Safe Auto
- State Farm