Report: Open-Loop Prepaid Revenue on Strong Growth Track Through 2017 (July 23, 2013)
July 23, 2013
U.S. open-loop prepaid revenue will reach $4.5 billion this year, up 18.4 percent from $3.8 billion in 2012 as growth rates on prepaid load volume, transactions and revenue continue to exceed 15 percent annual growth, according to new data from First Annapolis Consulting. Increasing consumer adoption of GPR products, which accounted for an estimated 42 percent of total open-loop prepaid revenue in 2012, is helping to make open-loop prepaid cards one of the payment industry’s highest-growth products, Frank Verhaegen, a First Annapolis associate, wrote in the report. Overall open-loop prepaid card revenue—encompassing gift, incentive, employee benefits, payroll, government and GPR cards—is on track to reach $7.6 billion by 2017, up 68.8 percent from this year’s total, the firm said.
Excluding GPR cards, prepaid cards altogether will continue to contribute a greater share of total open-loop prepaid revenue over the next few years, but if present trends continue, GPR revenue will be nearly half of overall prepaid revenue within four years, First Annapolis forecasts. Non-GPR open-loop prepaid card revenue will reach $2.6 billion this year, up 18.2 percent from $2.2 billion last year and by 2017 non-GPR, open-loop revenue is on track to reach $3.9 billion, up 50 percent from $2.6 billion this year. At present growth rates, GPR revenue alone is forecast to reach $1.9 billion this year, up 18.7 percent from $1.6 billion last year, and by 2017 GPR revenue is on track to reach $3.7 billion, up 94.7 percent from $1.9 billion forecast for this year, the firm said. One factor propelling GPR’s growth is the segment’s interchange-cut exemption from the Durbin Amendment, which has made GPR cards more appealing to bank issuers, according to Verhaegen.
