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Market Research Report

Prepaid Cards in the U.S., 7th Edition

Published by Packaged Facts Product code 941819
Published Content info 133 Pages
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Prepaid Cards in the U.S., 7th Edition
Published: June 11, 2020 Content info: 133 Pages
Description

The COVID-19 pandemic is reshaping the prepaid card industry. As store closures hobble the mighty J-hook, and related trends push prepaid card users into the digital realm, these cash-loyal consumers find themselves choosing their card over cash and coins. And while short-term payment value pain hits most segments of the prepaid card market, long-term interchange fee revenue gains are in the making. Of course, card type and other growth factors helps shape the longer-term outcome: B2B prepaid cards, for example, continue their growth tear, while the proliferation of app-based prepaid digital accounts pressures consumer general-purpose reloadable prepaid card growth. Overall, Packaged Facts expects the prepaid card market to grow by a healthy 6% average annual rate from 2020 to 2024.

‘Prepaid Cards in the U.S., 7th Edition’, provides insight into significant near-term and longer-term factors shaping this varied and growing card segment.

More specifically, this report:

  • provides a market size and forecast for the prepaid card market, including trended payment value for general use (open-loop) and private label (closed-loop) prepaid cards, by card type, with related growth opportunity analysis
  • assesses in detail the effects of the COVID-19 pandemic on the prepaid card industry, including cash conversion, payment electronification, interchange, and deposits, as well as effects by card type
  • gauges (reloadable and non-reloadable) prepaid card use trends during 2014-2019, breaking prepaid card use down by card network; banked status; credit score; cash preference; and app and smartphone use
  • identifies top general-purpose prepaid card brand and card network brands, by demographic
  • studies reasons for choosing general-purpose reloadable prepaid cards, including use cost; overdraft fee avoidance and debt management; credit and bank account substitution; breadth of acceptance; and reloading method
  • explores prepaid card marketer and issuer strategies, including those of Axos Financial, The Bancorp Bank, Green Dot, MetaBank and Netspend
  • Analysis includes competitive positioning, new product introductions, company innovations, and trended performance analysis.
  • Heavy emphasis is placed on add-value proprietary estimates for load value, purchase value, and other metrics otherwise not published by these industry participants.
  • Thorough analysis of the app-based digital banking threat is also included.
  • explores a variety of prepaid card industry challenges and solutions, including regulatory issues, pricing, and profit factors, broadening the target audience, bank account competition, and fraud

VIDEO DEMONSTRATION

Table of Contents
Product Code: LA16121077

TABLE OF CONTENTS

CHAPTER 1: EXECUTIVE SUMMARY

  • REPORT SCOPE
  • REPORT SUMMARY
    • Market Size and Forecast
  • Growth Opportunity
    • Coronavirus Pandemic Impact on the Prepaid Card Industry
    • App-Based Digital Banking Threatens GPR Prepaid Industry
    • Prepaid Card Use Trends
  • General-Purpose Prepaid Card Use Trends: 2014-2019
  • General-Purpose Reloadable Prepaid Card Use: 2014-2019
  • General-Purpose Non-Reloadable Prepaid Card Use: 2014-2019
  • Bank Account, Smartphone, and Banking App Use Analysis
  • General-Purpose Prepaid Card Brand and Card Network Brand Use
    • General-Purpose Reloadable Prepaid Card Feature and Use Rationales
  • General-Purpose Reloadable Prepaid Card Features Used
  • Money Movement and Payment Features: Demographic Analysis
  • Financial Management Features: Demographic Analysis
  • Reasons for Choosing Reloadable Prepaid Cards
    • Prepaid Card Marketer and Issuer Strategies
  • Axos Financial
  • The Bancorp, Inc.
  • Green Dot Corporation
  • MetaBank
  • Netspend

CHAPTER 2: MARKET SIZE AND FORECAST

  • U.S. PREPAID CARD MARKET SIZE AND FORECAST
    • Payment Value to Reach $377 Billion in 2020
      • Table 2-1 U.S. Prepaid Card Market Size, 2016-2020
    • 2024 Payment Value Forecasted at $475.3 billion
      • Table 2-2 U.S. Prepaid Card Market Size, 2016-2020
    • "Open-Loop" Prepaid Card Market Size, by Card Type
      • Table 2-3 U.S. Open-Loop Prepaid Card Market Size: By Type, 2016-2020
    • "Closed-Loop" Prepaid Card Market Size, by Card Type
      • Table 2-4 U.S. Closed-Loop Prepaid Card Market Size: By Type, 2016-2020
    • Sideways/Down: Consumer General-Purpose Reloadable Prepaid Cards
    • Near-Term Declines; Long-Term Incremental Growth: Gift Cards
    • Strong Near-Term/Incremental Long-Term Growth: Government Prepaid Cards
    • Moderate-to-Strong Growth: Healthcare Cards
    • Near-Term Declines; Moderate-to-Strong Growth: Payroll Cards
    • Strong Growth: B2B Payments

CHAPTER 3: CHALLENGES AND OPPORTUNITIES

  • CORONAVIRUS PANDEMIC IMPACT ON THE PREPAID CARD INDUSTRY
    • General-Purpose Prepaid Card Spend to Take Discretionary & Non-Discretionary Hit
    • Near- and Long-Term: Prepaid Cardholder Cash Preferences to Give Way
    • Data suggests prepaid card users still maintain stronger cash preferences
      • Table 3-1 Attitudes Toward Cash as Preferred Purchase Payment Method and Always Using Cash to Pay Bills, 2019 (general-purpose reloadable prepaid card vs. debit card vs. credit card users)
      • Table 3-2 Attitudes Toward Cash as Preferred Purchase Payment Method and Always Using Cash to Pay Bills: General-Purpose Reloadable Prepaid Card Users by HH Income Bracket, 2019
    • Near- and Long-Term: In-Store Purchases Pressured and Online Purchases Benefit
    • Near- and Long-Term: The J-Hook Takes a Gut Punch
    • Near- and Long-Term: Interchange Wins
    • Near-Term: Stimulus Bump
    • Near-Term Winner: Government Benefits Programs
    • Near-Term Loser: Payroll Cards
    • Near-Term Loser: Tax Refund Cards
  • APP-BASED DIGITAL BANKING THREATENS GPR PREPAID INDUSTRY
    • The Good: Prepaid Cards Adapt to Digital Banking World
    • The Spoiler? Fintech Marketers Undercut on Price and Deliver on Features
    • In Focus: Chime
  • Potentially and Realistically Free to Use
    • Table 3-3 Chime Account Fees, 2020
  • Savings Innovation
  • The Big Picture
    • The Consequences

CHAPTER 4: PREPAID CARD USE TRENDS

  • GENERAL-PURPOSE PREPAID CARD USE TRENDS: 2014-2019
    • Reloadable and Non-Reloadable Card Use Declines
      • Table 4-1 General-Purpose Prepaid Card Use, 2014-2019 (reloadable vs. non-reloadable)
    • Lower-Income Adults Remain a Sweet Spot
      • Table 4-2 General-Purpose Prepaid Card Use: By Age Bracket and HH Income Bracket, 2014-2019
    • Visa Leads Use but Mastercard Is Gaining Share
      • Table 4-3 General-Purpose Prepaid Card Use Share by Card Network, 2014-2019
  • GENERAL-PURPOSE RELOADABLE PREPAID CARD USE: 2014-2019
    • 18- to 34-Year-Olds as a Trouble Spot
      • Table 4-4 General-Purpose Reloadable Prepaid Card Use Share by Age Bracket and HH Income Bracket, 2014-2019
    • Declines Are an Industry Trend, not a Network-Specific One
      • Table 4-5 General-Purpose Reloadable Prepaid Card Use by Card Network, 2014-2019
  • GENERAL-PURPOSE NON-RELOADABLE PREPAID CARD USE: 2014-2019
    • Middle-Income Traction
      • Table 4-6 General-Purpose Non-Reloadable Prepaid Card Use: By Age Bracket and HH Income Bracket, 2014-2019
      • Table 4-7 General-Purpose Non-Reloadable Prepaid Card Use by Card Network, 2014-2019
    • Bank Account, Smartphone, and Banking App Use Analysis
      • Table 4-8 Bank Account, Smartphone, and Banking App Use: General-Purpose Reloadable Prepaid Card, Debit Card, and Credit Card Users (2014 vs. 2019)
  • GENERAL-PURPOSE PREPAID CARD BRAND AND CARD NETWORK BRAND USE
  • Overview
    • Table 4-9 General-Purpose Prepaid Card Use by Card Brand/Network, 2018
    • Demographic Analysis
      • Table 4-10 General-Purpose Prepaid Card Use by Card Brand/Network: By Age Bracket, 2018
      • Table 4-11 General-Purpose Prepaid Card Use: By HH Income Bracket and Card Brand/Network, 2018
      • Table 4-12 General-Purpose Prepaid Card Use by Card Brand/Network: By Credit Score, 2018
      • Table 4-13 General-Purpose Prepaid Card Use: by Banked Status and Card Brand/Network, 2018

CHAPTER 5: GENERAL-PURPOSE RELOADABLE PREPAID CARD FEATURE AND USE RATIONALES

  • GENERAL-PURPOSE RELOADABLE PREPAID CARD FEATURES USED
    • Table 5-1 General-Purpose Reloadable Prepaid Card Features Used, 2018 vs. 2020 (percent of adults)
    • Money Movement and Payment Features: Demographic Analysis
      • Table 5-2 General-Purpose Reloadable Prepaid Card Money Movement and Payment Features Used: By Age, 2020
      • Table 5-3 General-Purpose Reloadable Prepaid Card Money Movement and Payment Features Used: By HH Income Bracket, 2020
      • Table 5-4 General-Purpose Reloadable Prepaid Card Features Money Movement and Payment
    • Features Used: By HH Income Bracket, 2020 (18-34 years old vs. 35+ years old)
      • Financial Management Features: Demographic Analysis
        • Table 5-5 General-Purpose Reloadable Prepaid Card Financial Management Features Used: By Age Bracket, 2020
        • Table 5-6 General-Purpose Reloadable Prepaid Card Financial Management Features Used: By HH Income Bracket, 2020
        • Table 5-7 General-Purpose Reloadable Prepaid Card Financial Management Features Used: By HH Income Bracket, 2020 (18-34 years old vs. 35+ years old)
  • REASONS FOR CHOOSING RELOADABLE PREPAID CARDS
    • Acceptance and No Fees Rule the Roost
      • Table 5-8 Important Reasons for Choosing a Prepaid Card, 2018 vs. 2020
    • Influence of Direct Deposit on Card Use
      • Table 5-9 Prepaid Card Reload, Monthly Fee, Withdrawal, and Purchase Behavior, 2018 vs. 2020
      • Table 5-10 Prepaid Card Reload, Monthly Fee, Withdrawal, and Purchase Behavior: Direct Deposit vs No Direct Deposit, 2020
      • Table 5-11 Prepaid Card Reload, Monthly Fee, Withdrawal, and Purchase Behavior: By HH Income Bracket, 2020 (18-34 years old vs. 35+ years old)

CHAPTER 6: PREPAID CARD MARKETER & ISSUER STRATEGIES

  • AXOS FINANCIAL
    • Prepaid Card Programs
      • Table 6-1 Axos Financial: General-Purpose Reloadable Prepaid Card Program Brands, Managers, and Networks, 2020
    • The Tax Man Cometh: H&R Block Prepaid Emerald Card and Related Products
    • The Card Leverages Ancillary Products to Grow
      • Table 6-2 H&R Block Emerald Card: Active Cards, Deposits, and Revenue, with Per-Card Metrics, 2012-2016
    • H&R Block Revenue Trends Suggest Card Growth
      • Table 6-3 H&R Block Revenue: Total, Refund Transfer, Emerald Card, and Emerald Advance, 2014-2019
    • Deposits Trends Suggest Emerald Card Growth
    • But Cardholder Engagement Remains a Struggle
      • Table 6-4 Axos Financial, Inc. Prepaid Card Deposits: Q4 2015-2019 vs. Q1 2016-2020
    • Refund Advance Origination Trends Suggests Room to Grow
      • Table 6-5 Axos Financial, Inc. Prepaid Card Deposits: Q4 2015-2019 vs. Q1 2016-2020
    • H&R Block Relationship Strongly Impacts Deposits
      • Table 6-6 Axos Financial, Inc.: Number of Deposit Accounts by Type, 2013-2019
    • Prepaid Card Interchange Exemption Breach
  • THE BANCORP, INC.
    • Regional Lender and Prepaid Card Leader
    • Variety of Prepaid Card Programs, Program Managers, and Card Verticals
      • Table 6-7 The Bancorp Bank: General-Purpose Reloadable Prepaid Card Program Brands, Managers, Networks, and Card Types, 2020
    • But Non-Prepaid Debit Fintech Partnerships Drive Growth
      • Table 6-8 The Bancorp Bank: Non-Prepaid Debit Fintech Partnerships: By Name, Network Brand, and Launch Date, 2012-2020
    • And General-Purpose, Reloadable Cards Are Being Replaced
    • Healthcare a Bright Spot
    • Prepaid Card Deposits on the Rise
      • Table 6-9 The Bancorp: Average Q4 Total and Prepaid Card Deposits, 2016-2019
    • Real-Time ACH Growth
    • Performance Trends
      • Table 6-10 The Bancorp: Load Value and Selected Non-Interest Income Metrics, 2015-2019
    • Prepaid Card Growth Trends
  • GREEN DOT CORPORATION
    • Table 6-11 Green Dot Consumer Product Features and Platform Capabilities, 2020
    • Market Segments
    • Operating Segments
      • Table 6-12 Green Dot Operating Revenue by Segment, 2015-2019
    • Key Program Brands
      • Table 6-13 Green Dot General-Purpose Reloadable Prepaid Card Program Brands and Networks, 2020
      • Table 6-14 Green Dot General-Purpose Reloadable Prepaid Card Program Management-Only Brands and Networks, 2020
    • Key Relationship: Walmart
      • Table 6-15 Green Dot Operating Revenue and Revenue Attributable to Walmart, 2015-2019
    • The Walmart MoneyCard
      • Walmart MoneyCard: Nuts and Bolts
      • Savings, Budgeting, and Direct Deposit Features
        • Stimulus Grab
        • Key Competitive Threat: Low-Cost App-Based Digital Banking
        • Key New Product: Unlimited by Green Dot
        • Key Service: BaaS
          • Apple Cash
          • Uber
          • Intuit
          • Wealthfront
          • Stash
    • Key Performance Trends
      • Parsing Prepaid from Debit Is a Trickier Proposition
        • Table 6-16 Green Dot Active Cards, Cash Transfers, Load Value, Purchase Value, GPR Deposits, and
      • Tax Refunds Processed, 2013-2019
        • Table 6-17 Green Dot Active Cards, Cash Transfers, Load Value, Purchase Value, GPR Deposits, and
      • Tax Refunds Processed: Percentage Annual Growth, 2014-2019
    • Key Revenue Trends
      • Table 6-18 Green Dot Operating Revenue by Type, 2015-2019
    • Per-Card Revenue, Load Value, and Purchase Value Trends
      • Table 6-19 Green Dot: Per-Card Prepaid Card Analysis: Revenue by Type, Load Value, and Purchase Value, 2015-2019
    • COVID Crunch
  • METABANK
    • Card Brands and Segments
      • General-Purpose Reloadable Prepaid Card Programs
        • Table 6-20 MetaBank General-Purpose Reloadable Prepaid Card Program Brands, Managers, and Networks, 2020
      • Payroll Expansion
        • Table 6-21 MetaBank Payroll Card Program Brands, Managers, and Networks, 2020
      • Tax Services Expansion
        • Table 6-22 MetaBank Prepaid Card Program Brands, Managers, and Networks: By Card Type, 2020
        • Table 6-23 MetaBank: Refund Transfer Fee and Tax Advance Metrics, 2016-2019
    • Performance Trends
      • Table 6-24 MetaBank: Meta Payment Systems Deposit Analysis, 2015-2019
    • MPS Card Fee Income Stagnation and Decline
      • Table 6-25 MetaBank: MPS Non-Interest Income, Card Fee, Deposit Fee, and Interchange Analysis, 2016-2019
  • NETSPEND
    • Overview
    • Competitive Positioning
    • Card Brands
      • Table 6-26 Netspend Reloadable Prepaid Card Programs: Brands, Issuers, and Networks, and Card Types, 2020
    • Retail Distribution
    • Performance Trends
    • Revenue Stagnation and Active Card Declines
      • Table 6-27 Netspend: Revenue, Active Cards, and Per-Card Revenue: By Revenue Stream and Direct Deposit Use, 2014-2019
      • Table 6-28 Netspend Prepaid Card Load Value, 2014-2019
    • Debit Competition Affects Card Base and Masks Load Value Trends
      • Table 6-29 Netspend: Active Cards and Load Value with Direct Deposit Share, 2014-2019
    • Direct Deposit Remains King
      • Table 6-30 Netspend: Total and Per-Card Revenue and Load Value: By Card Direct Deposit Status, 2014-2019
    • COVID Crunch

APPENDIX

  • METHODOLOGY
    • Consumer Survey Methodology
    • Population Estimates
    • Prepaid Card Exemptions from Debit Card Interchange Limits
  • ABBREVIATIONS
    • Table Appendix-1: Report Abbreviations, 2020
  • TERMS AND DEFINITIONS
    • Bank account number payment
    • Banked status
    • Card issuer
    • Card network
    • Deduction from income
    • Demand deposit account (DDA)
    • Electronic funds transfer (EFT)
    • Interchange fee
    • Issuing bank
    • Merchant acquirer
    • Online banking bill payment
    • PIN-based/single-message transactions
    • Prepaid card
    • Processor
    • Program manager
    • Signature-based/dual-message transactions
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