Open-Loop Prepaid Card Growth To Continue, New Study Predicts
The future looks bright for the open-loop prepaid market, according to a new study from Mercator Advisory Group.
The report, the 14th Annual U.S. Open-Loop Prepaid Cards Market Forecasts, 2017–2020, examines loads, growth potential, and market dynamics across various prepaid categories, including gift cards, government, and financial services, and provides an analysis of the prepaid industry through 2020.
The open-loop market is expected to show a 5 percent compound annual growth rate through 2020, when it will reach a load total of $353.6 billion.The open-loop prepaid market has followed a consistent trend of growth, with the market growing in 2016 by 3 percent to $295 billion.
A few key highlights from the forecast:
– Open-loop gift cards are expected to continue to grow by 3 percent through 2020, increasing total loads to $22.3 billion. According to Mercator, two reasons for this growth are the desire for more gift card choice, and the growth of self-use.
– Financial services cards are expected to grow by 5 percent through 2020 for a total load of $116.8 billion. This is a result of the rise of unbanked and underbanked consumers, who are turning away from traditional banking accounts as more new features are added to FS cards.
– Employee and partner incentives are predicted to grow by 5 percent through 2020 with a total load of $10.5 billion. Mercator adds that there is additional room for open-loop reloadable cards as recurring employee incentives, like sales commissions.
The versatility and adaptability of open-loops cards is a key to its growth and success. Prepaid cards are helping consumers spend, save, and control their finances like never before, retailers are using them to increase consumer loyalty and retention, and employers are increasing sales, reducing turnover, and incentivizing good work.
Have questions or looking to learn more about prepaid cards? Feel free to contact us by visiting our contact page. DCR offers years of experience and expertise in prepaid card program—from the launching stage all the way through fulfillment and program management.