CFSI Study: Underserved Market Worth $103 Billion; GPR to Maintain Double-Digit Growth (Dec. 11, 2014)
The financially underserved market in the U.S. generated approximately $103 billion in fee and interest revenue in 2013, based on consumer usage volume of $1.3 trillion in financial products and services, according to a new study from the Center for Financial Services Innovation (CFSI) and Core Innovation Capital. The 2013 total marks a 7.1 percent increase compared with $96 billion in 2012, and the market is projected to grow by 4.6 percent from 2013 to 2014, reaching total revenue of $107 billion. The data demonstrate significant market opportunities for FIs and investors, the study noted.
“The underserved comprise a diverse and growing market,” CFSI President and CEO Jennifer Tescher tells Paybefore. “Our goal with this study is to help financial services providers better understand and identify the complex financial needs of this marketplace as they launch safe, affordable, high-quality financial products and services to improve consumer financial health.”
The annual revenue growth of GPR prepaid cards was more than 30 percent in 2013; however the report predicts that annual growth will drop to 13.3 percent in 2014. The report attributes the predicted slowdown to market saturation, but notes that new growth areas include younger consumers and those with higher incomes, bank accounts and credit cards, whose use of GPR cards rose swiftly in 2013.
“Prepaid cards have moved beyond basic transactional products, becoming robust financial platforms,” Tescher says. “We are seeing this market mature, with more Americans using these tools to build financially healthier lives.”
Revenue growth for prepaid payroll cards in 2013 was 11.7 percent, and growth for 2014 is estimated at 2.9 percent. Payroll card growth is projected to slow in 2014 because of media and government scrutiny as the industry awaited federal guidance on GPR prepaid cards. Proposed guidelines issued by the CFPB last month include provisions for payroll cards as well.
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