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The Green Sheet Online Edition

August 13, 2007 • Issue 07:08:01


Prepaid cards: An obsolescent evolution?

The prepaid card industry's increasing success will ultimately contribute to its demise, a new report from Aite Group LLC, a research and advisory firm, predicts.

Gwenn B‚zard, the report's author, expects the industry will have "ceased to exist as a recognizable entity" by the middle of the next decade.

"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," B‚zard stated.

In the meantime, prepaid cards, both branded and private label, will continue their evolution.

Branded prepaid cards are bank-issued cards branded with a card network logo, such as Visa U.S.A. or American Express Co.

Private label cards are issued by a retailer or other corporate entity and do not bear a card network logo.

Aite estimates the value of all prepaid card transactions in the United States will increase from $113 billion in 2007 to $178 billion in 2010.

The number of prepaid card transactions will grow from 4.3 billion in 2007 to 7 billion in 2010.

Three major trends currently shaping the industry include the:

  • Introduction of reload services
  • Drive to offer private label prepaid card products to small merchants
  • Integration of branded and private label prepaid cards into various industries' business processes, including health benefits and cash management products.

 Prepaid cards: An obsolescent evolution?
To see a hi-res pdf of the ISOMetrics page click here: ISOMetrics page
For more information, visit www.aitegroup.com end of article

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