Open-loop prepaid market growth slows

In its annual assessment of the open-loop, network-branded prepaid card market in the United States, Mercator Advisory Group reported that the market experienced "much smaller growth" than the advisory originally estimated. The open-loop market grew by "only" 6 percent in 2012, reaching $194.5 billion, up from $184.1 billion in 2011, according to Mercator.

In the Tenth Annual U.S. Open-Loop Prepaid Cards Market Assessment and Prepaid Market Overview, Mercator tracked 19 open-loop prepaid market segments, including what it calls the Cash Access category, comprised of such products as travel, general purpose reloadable and person-to-person money transfer cards. Mercator said the cards in that category grew by a combined at 12 percent in 2012, with a total load of $83 billion last year, up from $74.1 billion in 2011.

"Growth in the open-loop prepaid market has been driven by the cash access and government categories, but the future growth of the market could be hurt by excessive regulations," said Tim Sloane, Director of the Prepaid Advisory Service at Mercator and author of the report.

In Mercator's 2012 open-loop assessment of 2011 numbers, that same category grew by a combined 24 percent, up to $184.1 billion from $148.4 billion in 2010. In the 2012 assessment, Sloane similarly commented that potential regulatory actions could hurt future growth in that category.

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