Mixed forecast for open-loop prepaid cards

Growth in the open-loop prepaid card market was spotty last year, marked by weakening in traditionally fast-growth segments in terms of total loads. As a result, Mercator Advisory Group adjusted its overall expectations in the 14th Annual U.S. Open-Loop Prepaid Cards Market Forecasts, 2017-2020 analysis of market dynamics across all prepaid segments.

According to Mercator's projections, open-loop prepaid loads will reach an estimated $353.6 billion in value by 2020, led by the FSA/HSA (flexible spending account/health savings account) tax deferred programs segment and the benefits segment. In contrast, declining prepaid loads in the money/financial services segment may continue as more individuals open bank accounts.

Time to diversify

As revealed in the report, load dollar volumes for certain segments approaching market saturation are expected to see further declines, whereas less saturated segments will offer opportunities to prepaid card providers who wish to expand into those segments.

"Prepaid providers should be evaluating their businesses and looking for ways to diversify," said Ben Jackson, Director of Mercator Advisory Group's Prepaid Advisory Service, and author of the report. "Opportunities in the prepaid market shift with economic and regulatory changes. New technologies such as the Internet of Things, and new use cases such as corporate disbursements may provide growth markets in the years to come."

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