U.S. Prepaid Card Transactions to Become Mainstream

The value of U.S prepaid card transactions will grow by 57 percent to US$178 billion in 2010 from US$113 billion in 2007, according to a report from Aite Group.  

The U.S. consultancy says in a new report that prepaid cards will increasingly become mainstream in the U.S.   "In the coming few years, the concept of ‘prepaid’ will grow increasingly irrelevant, as prepaid cards become ever-more successful," Gwenn Bézard, report author and a research director at Aite Group, says in a statement.  

"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.”  

Branded prepaid cards include cards issued by a bank that bear the logo of a card network such as Visa or MasterCard.

Private-label prepaid cards include cards which are issued by a retailer, and which are not branded by any major card network.    

The combined number of branded and private-label prepaid card transactions in the U.S. will grow from 4.3 billion in 2007 to 7.0 billion by 2010, Aite says.  

Branded prepaid and private-label prepaid card processors will generate a combined US$1.35 billion in revenues by 2010, up from US$770 million in 2007, it predicts.   

The report says that the three major trends for the prepaid industry are: the introduction of reload services for branded and private-label prepaid cards; the drive to offer private-label prepaid card products to small merchants; and the full integration of branded and private-label prepaid cards into various industries' business processes.