According to a recent report published by Allied Market Research, titled, “Prepaid Card Market By Offering, Card Type, and End User: Global Opportunity Analysis and Industry Forecast, 2021–2030”, the global prepaid card market size was valued at $1.73 trillion in 2019, and is projected to reach $6.87 trillion by 2030, growing at a CAGR of 18.2% from 2020 to 2030.
A prepaid card is an alternative banking card that permits consumers to spend the money up to the amount loaded on the card. It is similar to debit card and can be used for making purchases, and paying online bills, gas bills, shopping. These prepaid cards are kind of general purpose reloadable (GPR) cards, which are issued to the people who do not qualify for a banking account or cannot afford the fees linked with maintaining the bank account. These cards work with both closed and open loop networks.
Factors such as rise in demand for cash alternatives and availability of affordable and energy-efficient prepaid cards drive the growth of the market. In addition, developments in the e-commerce industry and increase in adoption of prepaid cards because of adding funds through multiple avenues fuel the growth of the prepaid card market. However, lack of standardization and prone to fraudulent attacks hampers the growth of the prepaid card market. Furthermore, increase in unbanked and underbanked population is expected to provide lucrative opportunities for the prepaid market growth are expected to fuel the market growth.
The retail segment is expected to garner a significant share during the forecast period due to increase in spending power of youth in North America and Europe and these cards have better efficiency associated with risk management, enhanced security, flexibility, immediate liquidity, and low processing costs. However, the corporate segment is expected to grow at the highest rate during the forecast period, as it offers cost cutting opportunities for employers in terms of processing payrolls. Employees need not carry cash, wait in long queues, and shop online using these cards.
North America is one of the key contributors to the prepaid card market share, owing to large unbanked/undeserved population, rise in demand for travel cards, massive closed loop market, developed market for corporate and government programs, and increase in usage of prepaid cards, as substitutes for current accounts. The growth in analysis of large internet-enabled data sets, increase in awareness of cards, ease of access, and developments in the e-commerce industry are expected to boost the prepaid card market trend in the region. Asia-Pacific consists of a large unbanked population, and multiple businesses are still run by the use of cash. However, increase in penetration of Internet among rural areas of Asia-Pacific creates a lucrative opportunity for the prepaid card market growth.
The prepaid card market has witnessed significant growth in the past few years. However, the market is projected to grow in the upcoming years after the recovery from the COVID-19 pandemic. This is attributed to unprecedented transport restrictions, resulting in decline of new product purchases, which has increased demand for prepaid card on existing products in the market.
For instance, according to “STREET FOOD LIVE”, the government’s School Meals Initiative was introduced on March 31, which allow children to benefit from a national voucher scheme for free meal; thus, allowing them to continue having access to meals while they stayed at home. Through this, digital codes along with the traditional physical vouchers have been successfully welcomed. These factors are anticipated to provide potential growth opportunities in the coming years.
Key Findings of the Study
- By offering, the general purpose card segment generated the highest revenue in 2019.
- By card type, the closed loop card segment generated the highest revenue in 2019.
- By end user, the retail segment generated the highest revenue in 2019.
- By region, the North America generated the highest revenue in 2019.
The key players profiled in the prepaid card industry include American Express Company, BBVA USA Bancshares, Inc., Brink's Incorporated, Green Dot Corporation, H&R Block Inc., JPMorgan Chase & Co., Kaiku Finance LLC., Mango Financial, Inc., MasterCard, and PayPal Holdings, Inc. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry. This study includes prepaid card market trends, prepaid card market analysis, and future estimations to determine the imminent investment pockets.