Prepaid Cards: The State of the Industry

Boston, MA - 23 July 2007

Aite Group expects the value of branded and private label prepaid card transactions to amount to US$178 billion by 2010, up from US$113 billion in 2007.

A new Impact Report from Aite Group sizes and forecasts the evolution of the prepaid card industry in the United States. It examines the key trends impacting each major component of the industry value chain.

Among key findings, the report reveals that despite rapid industry growth, gaining scale in branded prepaid card processing remains a major challenge for processors and issuers. The report also indicates that the introduction of reload services for branded and private label prepaid cards, the drive to offer private label prepaid card products to small merchants, and the deep integration of branded and private label prepaid cards into various industries' business processes are today's three major trends reshaping the industry.

"In the coming few years, the concept of prepaid will grow increasingly irrelevant as it becomes ever-more successful," predicts Gwenn Bézard, research director at Aite Group and author of the report. "Over time, the subtle distinctions between the various card products, such as debit versus prepaid versus credit, and branded versus private label, will erode as products grow in diversity and complexity and mesh together. By the middle of the next decade, the prepaid card industry will have ceased to exist as a recognizable entity."

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