Prepaid Card Market Size, Analysis And Forecast To 2030

(MENAFN- Straits Research) Prepaid cards are an alternative to traditional bank cards that allow users to spend up to the saved value. It is similar to a debit card and can be used for the same purposes, such as making purchases, paying bills online, paying for gas, shopping, and making monthly payments, just like a debit card can. These prepaid cards are a sort of GPR, or General-Purpose Reloadable Card issued to individuals who do not fit the requirements for a bank account or cannot afford the fees associated with maintaining one. These payment solutions have supplanted traditional bank accounts and present an innovative money management method.
Market Dynamics
The Demand for Cash Alternatives and Growth in Internet Users to Drive the Global Prepaid Card Market
Numerous studies indicate that advisers have witnessed an increase in client demand for cashless transactions as clients seek low-risk investments with higher returns than traditional cash-based accounts. These prepaid cards decrease the risk of overspending because only purchases up to the card's balance are permitted. Prepaid cards are a crucial alternative for numerous applications since they can be loaded via various platforms and methods, including bank account transfers, direct payments, or cash, both online and in-person.
Additionally, corporations are focusing on novel cash alternatives to facilitate daily operations. Card issuers provide straightforward payment options. For instance, VA Tech Ventures developed“Happay,” a new business expense card that managers can administer remotely through a mobile or web interface. This card allows the employer to set restrictions, load funds, monitor expenses, and authorize costs in real-time. All of these factors are projected to boost the rise of the prepaid card market. Due to the rapid increase of e-commerce, consumers must utilize plastic money instead of carrying cash in their pockets.
According to data compiled by several institutions, the younger generation has played a significant role in the global transition away from credit card use for transactions. For example, the payments industry in Dubai is undergoing major transformation as an increasing number of customers abandon credit cards in favor of prepaid debit cards for online shopping, travel, and charitable contributions. Customers without bank accounts find it convenient to use these cards as alternatives to credit and debit cards. Consequently, it is expected that prepaid cards will continue to dominate the electronic payment market.
The Unbanked and Under-banked Population to Create Global Prepaid Card Market Opportunities
Numerous groups have significant rates of underbanked and nonbanking, including lower-income households, households with less education, younger households, and others. In 2018, the Federal Deposit Insurance Corporation (FDIC) estimated that 6.5% of American families lacked a bank account, indicating that 8.4 million Americans were still functioning without one. This group often chooses prepaid cards since they are dependable, affordable, and require banking alternatives that may fulfill their financial transaction requirements.
In 2017, there was a 37% increase across prepaid cards from Mexico in Latin America and the Caribbean, which led to a staggering 58% increase in the average number of transactions. This buying pattern is one of the unmistakable indications that prepaid instruments have become a part of daily life for such demographics and that customers are open to evaluating various prepaid card options. And so, it is projected that the increasing use of prepaid cards by the unbanked population will create lucrative opportunities for market participants.
Regional Insights
North America will presumably command the regional market while expanding at a CAGR of 13.8%. The massive unbanked/underbanked population, the rising demand for travel cards, the enormous closed-loop market, the established market for business and government programs, and the rise in prepaid card usage are the primary factors influencing the growth of the prepaid card industry in North America. Due to the presence of nearly 25 billion unbanked individuals in this region, they constitute the primary market for prepaid cards. In addition, the United States accounts for more than fifty percent of the global prepaid card market. Increased digitalization, cloud banking, and enhanced mobile banking are also anticipated to contribute to industry growth.
In addition, the expansion of the e-commerce industry and the rise in internet users, card awareness, accessibility, and usability all contribute to the market's growth. The substantial underbanked population in the United States is primarily responsible for developing the prepaid card business. On September 1, 2018, American Express and Walmart introduced the "Bluebird card," a prepaid card that can be linked to a mobile app and has no minimum balance requirements. This is the appropriate replacement for current accounts due to its lower fees. The emergence of the e-commerce industry provides market participants with new growth opportunities.
The Asia Pacific is presumed to hold USD 3,171 billion, growing at a CAGR of 17.85%. Due to the widespread use of prepaid cards in Australia, China, India, and Japan, the Asia-Pacific region holds a substantial share of the industry. In Japan, prepaid cards are utilized for micropayments in airports, vending machines, highway service stations, and public transportation, among other areas. Additionally, the rise of prepaid in India is fueled by the unbanked population, as people prefer to spend their money independently. Prepaid cards are very commonly accepted as gifts and employee bonuses in China. There is a sizeable unbanked population in Asia-Pacific, and many businesses are still cash-based.
Nonetheless, the rising internet use across rural areas in the Asia Pacific presents a lucrative opportunity for market expansion. Since 90% of India's post offices are located in rural areas, the country's Department of Posts intends to launch prepaid cards to increase rural customers' knowledge. In addition, the government has begun disbursing wages and social security benefits via prepaid cards, which is expected to create lucrative market expansion opportunities.
Key Highlights

The global prepaid card market had a revenue holding of USD 2,219.3 billion in 2021. It is expected to reach USD 8,374.7 billion by 2030, growing at a CAGR of 15.9% during the forecast period (2022-2030).
Based on the card type, the closed-loop card section is presumed to hold the largest revenue share, growing at a CAGR of 14.87%.
Based on the usage, the general-purpose reloadable card section will presumably hold the largest market share, growing at a CAGR of 14.3%.
Based on the end-user, the retail establishment section will presumably hold the largest share, growing at a CAGR of 12.9%.
Based on the regional segmentation, North America will presumably command the regional market while expanding at a CAGR of 13.8%.

Competitive Players in the Market

Green Dot Corporation (U.S.)
NetSpend Holdings, Inc. (U.S.)
H&R Block Inc. (U.S.)
American Express Company (U.S.)
JPMorgan Chase & Co. (U.S.)
PayPal Holdings, Inc. (U.S.)
BBVA Compass Bancshares, Inc. (U.S.)
Mango Financial, Inc. (U.S.)
UniRush, LLC
Kaiku Finance LLC. (the U.S.)

Market News

In 2022, Green Dot Corporation and Plaid established a cooperation to offer GO2bank customers secure open finance solutions. The companies joined forces to provide GO2bank customers with an API-based, token-based open financial experience that enables the data connectedness that today's consumers want. The collaboration uses Plaid's ground-breaking open financial API product Plaid Exchange, which allows businesses to safely and swiftly enable data connectivity on behalf of their clients.

Global Prepaid Card Market: Segmentation
By card type

Closed Loop Card
Open Loop Card

By usage

General Purpose Reloadable Card
Gift Card
Government Benefits/Disbursement Card
Incentive/Payroll Card
Others

By end-user

Retail Establishment
Corporate Institutions
Government
Financial Institutions

By region

North America
Europe
Asia-Pacific
LAMEA

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