Latest Forecast Is Especially Sunny for Prepaid Cards

Growth rates for open-loop cards are getting into high gear and will account for most of the expansion.

Maynard, Mass.-based Mercator’s latest annual forecast, for 2009-12, predicts that combined load volume on closed-loop and general-purpose, or open-loop, prepaid cards will hit $525.8 billion in 2012, up 112% from $247.6 billion last year.

The prepaid market is growing because providers are doing a better job in meeting customer needs, and because of the recession, according to Brent Watters, senior analyst in the firm’s prepaid advisory service. “You’re seeing better pricing, you’re seeing enhanced feature functionality, you’re seeing a better understanding of the end user and their needs,” Watters says. “You’re also seeing the effect of the economy, which is having an impact on behavior, which results in people moving away from credit and toward debit, prepaid and even cash.”

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