The Mercator Group just released the results of their “6th Annual Network Branded Prepaid Market Assessment” in which they review the “network branded” prepaid debit card market. The report shows some pretty astonishing growth in the debit card market.
Network branded prepaid cards are cards that carry a logo from Visa (NYSE: V), MasterCard (NYSE: MA), American Express (NYSE: AXP) or Discover (NYSE: DFS). Network branded cards are typically reloadable cards. These cards are also referred to as “open loop” debit cards (as opposed to “closed loop” cards which are commonly used as gift cards usable only at the merchant associated with the card).
The Mercator Group’s report shows some pretty amazing growth in the network branded prepaid card area. Here are a few quotes from Mercator Group’s summary of the report (you can read what Mercator has to say about it here:
- The total amount of dollars loaded onto both types of prepaid card products (“open loop” cards as well as “closed loop” cards) in 2008 was $247.7 billion. This, apparently, was an increase of over twelve percent (or $27.8 billion more was loaded on cards in 2008 than in 2007).
- Network Branded prepaid cards had loads of just over $60 billion in 2008, which was apparently an increase of almost 50% from the load amounts in 2007.
- Mercator also found that so called “open loop” gift cards (such as the Visa gift cards, which are typically not reloadable) are catching up to the older style of “closed loop” gift cards (which are usable only at the sponsoring merchant location). Mercator found that these open loop gift cards increased in use by over 50% from 2007.
- In another finding, Mercator suggests that Social Security debit cards (which were in a pilot phase in 2007), are not out of pilot and had almost $1.5 billion of funds loaded onto them in 2008.
People are starting to “get” the concept of prepaid debit cards, and are enjoying all the features these great products provide. Stay tuned for even more growth next year!