New Report from Aite Group Examines Branded Prepaid Card Issuing in the U.S.

Boston, MA - 14 January 2008

A new report from Aite Group, LLC provides insight into the business of branded prepaid card issuing in the United States. Based on a qualitative survey of nine issuers, including some of the largest prepaid card issuers in the country, the report reviews the key product, channel, distribution and technology issues they face today.

Issuers are generally happy with the performance of their prepaid card business, with only a quarter of respondents dissatisfied by their current performance in this domain. Issuers, however, estimate that regulatory pressures represent their most significant challenge (67% of respondents). A majority of respondents also view finding an effective way to market prepaid cards a serious impediment to their success.

Most issuers (78%) focus on selling prepaid cards directly to consumers through their own channels and marketing efforts. A sizeable group (44%) also focuses on issuing prepaid cards to employers and government agencies. While another sizeable group utilizes retailers' stores as a distribution channel, the majority (56%) currently stay away from selling through that channel.

"Banks could be savvier at using the various distribution options they have," says Gwenn Bézard, research director with Aite Group and co-author of this report. "While they view branches as their most successful distribution channel, many lack an integrated distribution platform. The online banking channel remains underutilized by most issuers, even though it tends to receive high marks by those embracing it. Also, many banks fail to consider third-party distribution channels to market their own cards."

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