Reports: Open- and Closed-Loop Markets Slow to Single-Digit Growth (Aug. 29, 2013)
Aug. 29, 2013
Following double-digit growth a year earlier, market growth for open- and closed-loop prepaid cards, as measured by total dollars loaded, slowed from 2011 to 2012, according to recently released annual reports by Mercator Advisory Group.
Total dollars loaded in the open-loop prepaid market grew by only 6 percent to $194.5 billion year over year, according to the report, U.S. Open-Loop Prepaid Cards Market Assessment and Prepaid Market Overview. From 2010 to 2011, the open-loop prepaid card market grew 24 percent to $184.1 billion. Of the 19 open-loop prepaid market segments tracked, the cash access category, which includes travel cards, open-loop gift cards and financial services cards, among others, was the fastest growing at 12 percent, with a total load of $83 billion in 2012, up from $74.1 billion a year earlier.
“In broad terms, the entire open-loop prepaid market has seen a significant slowdown due to the weak economy, reduced government spending and new regulations that require prepaid suppliers to rethink or restructure all aspects of their business,” Tim Sloane, director of Mercator’s Prepaid Advisory Service and author of the open-loop report, tells Paybefore.
The closed-loop prepaid market grew to $309.1 billion in 2012, up 3 percent from $299.1 billion in 2011. The closed-loop card market grew 13 percent between 2010 and 2011. Though the growth of closed-loop cards has slowed, market segments for digital content, games and ringtones “grow at a rapid pace as more people choose to download songs, games, books and other content from the Internet,” according to Ben Jackson, Mercator senior analyst and author of the closed-loop prepaid card report.
