Bright Forecast for U.S. Prepaid Payroll Cards

Jan 11 2007

U.S open prepaid cards will experience a compound annual growth rate (CAGR) of 32 percent between the end of 2005 and 2009, with the industry set to attract new players and investments, according to a report by Mercator Advisory Group.

Open prepaid cards, carrying card association brands, will expand in many areas of consumer spending, forecasts Tim Sloane, author of the Mercator report "Prepaid Market Forecasts 2006 to 2009."

By 2009, open prepaid payroll cards will account for the largest share of the open prepaid card market, Sloane says. The amount loaded onto payroll debit cards will nearly triple from US$6.3 billion in 2005 to $17 billion in 2009, he says. 

Sloane also says that spending on employee and partner incentive open prepaid cards will treble from $790 million in 2005 to $2.8 million in 2009. Overall, the open prepaid card market will grow from $14 billion in 2005 to $44 billion in 2009. However, the closed prepaid card market will grow to $192.3 billion in 2009 from $151 billion in 2005, representing a CAGR of 6.25 percent, Sloane says.