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Table of Contents

Lead Story

You can protect your residuals

News

Industry Update

Top trends affecting payments in 2010

Best Buy boycott

Simulated onslaught to bolster security

Trade Association News

Features

Preventing the inside job

Industry Leader

Biff Matthews –
The shoulders others stand on

Selling Prepaid

Prepaid in brief

Mercator benchmarks health of the industry

Incentivizing the seller

Game cards find heaven in 7-Eleven

Views

Prepaid opportunity: Huge and growing

Patti Murphy
The Takoma Group

A new decade begins

Brandes Elitch
CrossCheck Inc.

Education

Street SmartsSM:
Don't break the bank

Jon Perry and Vanessa Lang
888QuikRate.com

Marketing in the next decade

Nancy Drexler
SignaPay Ltd.

One company per ISO deal

Adam Atlas
Attorney at Law

Net results

Dale S. Laszig
DSL Direct LLC

Company Profile

Payment Alliance International

New Products

Mobile trends applied to brick-and-mortar

Digital receipts with the L4150 terminal
Hypercom Corp., TransactionTree Inc.

Flexibility with a mobile terminal

Swipe It and QuickSwipe
Simply Swipe It LLC

Inspiration

Bounce the January blahs

Departments

Forum

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

January 25, 2010  •  Issue 10:01:02

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SP
Mercator benchmarks health of the industry

Many prepaid card markets continue to show steady growth despite the travails of the economy, according to Mercator Advisory Group research. While growth of the industry stalwart - the closed-loop, in-store gift card market - slowed down, such categories as consumer incentives, payroll and government payments experienced double-digit growth, Mercator said.

Mercator's Sixth Annual Prepaid Benchmark, showcased in a webinar entitled A Bright Spot in a Down Economy, is based on data collected from prepaid card issuers and processors in mid-2009 and then compared to the previous year's results, said Tim Sloane, Director of Mercator's Prepaid Advisory Service.

The data represents the amount of dollars loaded on the various prepaid card instruments as opposed to the amount of money spent using the cards. For purposes of research and analysis, Mercator breaks down the over- all prepaid card market into 33 segments and divides the segments into two categories: closed-loop and openloop cards.

Closed-loop top performers

In the closed-loop category, Sloane highlighted that:

The one downside is the slowdown of the in-store gift card market (cards not sold in prepaid card malls) to 1.8 percent growth.

Open-loop top performers

In the open-loop category, Sloane noted that:

The one anomaly in the open-loop category was Social Security payments, which grew by a whopping 11,000 percent ($1.2 billion loaded). Sloane explained that Social Security payments, one of the newer categories, began as a small, government-level pilot program that was then expanded into full-blown use, which accounted for the large percentage increase.

Gift card mall primacy

One point Sloane drove home was the importance of the gift card mall to the growth of the industry. It is a primary distribution channel for prepaid cards. In a survey of gift card mall operators, Mercator found that of the $8.7 billion loaded onto general purpose reloadable cards, almost $2 billion was loaded on cards sold through gift card malls. "It clearly demonstrates, I think, how rapidly a barometer of the industry the prepaid mall industry has become as a driver of convenience and volume for consumer-purchased prepaid products," Sloane said.

Going forward, how well the industry understands the gift card mall as a distribution hub and takes advantage of its marketing and promotional aspects will be "critical to moving the dial and continuing to maintain growth across the segments," Sloane added.


For more stories from SellingPrepaid E-Magazine, as well as breaking news and forums devoted to the prepaid sphere, please visit SellingPrePaid.com.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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