Closed-Loop Prepaid Usage Continue To Increase, According To New Research

The closed-loop prepaid market continues to experience growth, with a 2 percent compound annual growth rate forecasted through 2022, according to new research from Mercator Advisory Group.

The report, titled “16th Annual U.S. Closed-Loop Prepaid Cards Market Forecasts, 2018–2022,” provides an analysis of the growth and development of the prepaid cards industry through 2022. The report examines loads, growth potential, and market dynamics in the United States across all closed-loop prepaid card segments.

This report reviews and forecasts load dollar volume for closed-loop segments. This forecast highlights several segments that will continue to experience annual growth.

"Prepaid providers should be evaluating their businesses and looking for ways to diversify," C. Sue Brown, Director of Mercator Advisory Group's Prepaid Advisory Service and the author of the report, commented. “Opportunities in the prepaid market shift with economic, political, and regulatory changes. New technologies such as the internet of things, connected cars, and use of prepaid for transit and tolls may provide growth markets in the years to come.”

Highlights of the report include:

• Closed-loop prepaid cards are commonly known as gift cards — for gifting and/or self-use/budget control as well as for use as incentives and rewards cards. 
• The fastest-growing closed-loop prepaid card market segments in 2018 were Prepaid Mobile Minutes and Data, Tolls, and Consumer Incentives. 
• Load amounts in the Tolls and Transit segment will be influenced by infrastructure spend as well as the cost of fuel (gas, diesel, natural gas).