INDUSTRY & GIFT CARD REPORTS & STATISTICS:
Note: The following information is an excerpt from a Mercator Press Release on November 30, 2009
Prepaid Market Forecast 2009 to 2012
New Report Identifies Trends and Forecast Growth of the Prepaid Card Market
Boston, MA - November 30, 2009 -- The projected growth of the Prepaid Market in general, and the solid growth within particular prepaid segments, suggests that the Prepaid Industry will continue to attract new players and investments and will remain extremely dynamic.
Although many segments within both the Open and Closed Loop prepaid card markets have seen lower growth rates in 2008, the fact remains that growth for Network Branded solutions continue to outpace Closed Loop by a significant amount and has proven critical in maintaining a positive overall growth rate for the prepaid market as a whole.
Several significant adjustments have been made to this year's forecast to reflect increased reporting from prepaid processors. Most importantly several Open Loop segments have had future growth rates substantially increased to reflect the actual growth measured in 2008. Based on our adjustments Mercator Advisory Group now predicts that the Open Loop market will exceed the size of the Closed Loop market in 2012 by $41.8 billion.
This greatly anticipated report finds that the total load volume across all 33 Prepaid Market Segments, including all Open and Closed Solutions, will reach $525.8 billion by 2012.
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Note: The following information are excerpts from a Mercator Press Release on September 17, 2009
Sixth Annual Closed Loop Prepaid Market Assessment
New Research Report Examines Growth and Trends of Closed-Loop Prepaid Card Market
Boston, MA. - September 17, 2009 - - The total prepaid market, both Open Loop and Closed Loop, continues to grow, but a large part of this growth is driven by the increased adoption of Open Loop (network branded) cards as a replacement for checks - both government to consumer and business to consumer payments.Despite its large size, or perhaps because of it, the Closed Loop market has fallen into a rut and few investments are being made to create innovative solutions that increase the value of Closed Loop cards to both consumers and businesses.
In 2008, $187.24 billion was loaded on Closed-Loop prepaid solutions, a slight increase of 4.3 percent over the 2007 load of $179.59 billion. There were several fast growing Closed Loop market segments, such as Digital Media 24 percent, Consumer Incentives (Closed Loop) at 19.3 percent and Petroleum at 23.2 percent, however these markets were simply unable to compensate for several large segments that under performed. Several underperforming Closed Loop segments in 2008 were closely associated with consumer spend that was impacted by the recession and reduced corporate spending.
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"While clearly the economic downturn hasn't helped investments, it has instead increased the challenges that confront program managers, and the fact remains that the majority of the Closed Loop market has become lackadaisical. Program managers have apparently accepted slow growth as the industry's fate, instead of making needed investments," Tim Sloane, Vice President of Client Services and Director of Mercator Advisory Group's Prepaid Advisory Service and author of the report comments. "Mercator Advisory Group believes that growth in Closed Loop solutions will ultimately occur, but given current lackadaisical efforts by merchants, it seems likely that growth is a long ways off and will be achieved first by a shortlist of Closed Loop innovators."
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Highlights of this report include:
- The total load for all 33 Prepaid Segments in 2008 (Open & Closed) was $247.7 billion, a $27.4 billion increase over the $220.3 billion load in 2007 - an increase of 12.4 percent.
- Closed-Loop Gift Cards used for Consumer Incentives grew by 19.3 percent.
- The Digital Content Category had another great year growing to $8.04 billion for a growth of 17%. Of this Digital Media, driven by Apple and other music prepaid products, accounted for $4.71 billion for a 24% growth rate, despite a poor 2008 holiday season.
- The In Store Gift Card market segment only grew by $1.1 billion, while some specific merchant categories saw negative growth.
- While In Store sales were very slow, sales of gift cards through Third Party Distributors grew by 21 percent; the highpoint for most gift card merchants in 2008.
This report contains 28 pages and 16 exhibits.
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Mercator Advisory Group is the leading, independent research and advisory services firm exclusively focused on the payments and banking industries. We deliver pragmatic and timely research and advice designed to help our clients uncover the most lucrative opportunities to maximize revenue growth and contain costs. Our clients range from the world's largest payment issuers, acquirers, processors, merchants and associations to leading technology providers and investors.