Taking the Pulse of the Prepaid Card Industry

A new report from Aite Group identifies key trends impacting the prepaid card space, looks at challenges the industry must overcome, and identifies the most admired companies in prepaid according to industry insiders. Based on 21 in-person interviews with leading distributors, networks, processors, marketers and issuers, the report takes the pulse of the US prepaid card industry.

Among key findings, the report reveals that prepaid card industry stakeholders are bearish on private label prepaid cards, and cautiously optimistic about the future of branded prepaid cards. Of respondents, 82% feel the recession will have a negative impact on private label prepaid cards (mostly composed of merchant gift cards), while the majority of respondents (71%) see a positive impact of the recession on branded prepaid cards overall, largely driven by branded government cards, consumer incentive cards, payroll cards, and health care cards. In order to improve the market for prepaid cards as a whole, most agree that greater efforts must be made to educate the public on the benefits of prepaid cards. Technologies could also be better leveraged to improve the reload process.

“General-purpose prepaid cards may be benefiting from the recession, but cardholder attrition remains a major issue” says Gwenn Bézard, research director with Aite Group and author of this report. “The prepaid card industry must win the war on attrition. If left untackled, attrition could undermine the long-term prospects of this segment.”

The report mentions the following industry players: American Express, Blackhawk, Capital One, Discover, eCount (Citigroup), Fidelity Information Services, First Data, Galileo Processing, Green Dot, H&R Block, Incomm, i2C, JP Morgan Chase, MasterCard, MetaBank, Metavante, MoneyGram, Netspend, Simon Property Group, Unirush Financial, Visa, Wal-Mart and Western Union.


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