The Branded Prepaid Cards Market Is Rapidly Growing

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Recent studies have shown a significant increase in branded and private label prepaid card transactions. By the end of this year, these transactions could reach as high as $69 billion US. In 2009, this number was only about $54 billion. The increase has proven that more people than ever before are counting on prepaid credit cards to make their purchases. The estimated $69 billion is trending accurately as the first few months of the year are already going strong.

The studies focus on 3 trends that are currently shaping the prepaid credit card industry:

1. Reloadable cards have been introduced, which allow something other than the one-use cards to be on the market

2. More private-label cards are being offered to the smaller merchants as opposed to only getting from the big credit card companies

3. The cards are being integrated into a variety of industries' business schematics

There are some subtle distinctions between the different card products on the market. Debit, prepaid and credit all have their unique differences, but it is likely that they will start to all appear as one as the products continue to diversify. Further, the difference between private label and branded will begin to mesh together as the complexity of the cards increase.

The branded prepaid card market is in its beginning phases. Even though it has only been around for a short time, it has been able to gain a significant amount of traction. Consumers have proven they like the product and the market has grown significantly in a very short amount of time.

The US prepaid market in 2009 was split between three types of prepaid cards primarily. The first was payroll cards. These have been increasingly popular with employers and employees alike. Instead of an employee receiving a paycheck, they receive their pay on a prepaid card. The employee can then spend money as they need to without having to cash their check or deposit it into a bank. The card that came in second is the GPR cards or general purpose reloadable cards. Finally, gift cards from various merchants came in third.

There are a few reasons why the prepaid market has grown as fast as it has. Some consumers are finding it harder to get approved for traditional credit cards. As a result, they still want the benefits of using a credit card, such as being able to manage money effectively and shop online. Others are trying to stay out of debt and therefore use the prepaid cards to control finances without having to pay interest rates. As a result, the prepaid credit cards in all of their many forms are able to succeed in the recession when many other products cannot.

With so much of the nation in debt, the prepaid cards offer light at the end of the tunnel. Many of the cards contain features such as cash back and online account management. With features like this, consumers are able to get more for their money. The prepaid cards work just like a credit card without actually extending any credit. So as long as people get in the habit of budgeting and planning their finances more effectively, the prepaid cards can help consumers stay out of debt for the long-term.

For merchants who don’t currently carry prepaid cards, it can be a very lucrative business opportunity. Prepaid cards could continue to grow as an industry in the near future as more merchants begin to offer their own version of a prepaid card. Then it’s a matter of who has the best offerings.

With Visa and MasterCard both branding prepaid cards left and right, consumers have a lot of choices. It becomes necessary to shop the different cards to see where the most benefits lie. Looking at the fees are critical because some of the branded versus private label cards can vary significantly. Without a consumer realizing it, they could be paying high fees for using the card for even the smallest purchases. Merchants who offer these cards stand to make a good deal of money from the cards, but only if they offer benefits that go along with the fees that they charge.


As more and more prepaid cards enter the market, it will be easier for consumers to stay out of debt. The debt problems that many Americans face can be reduced significantly as the prepaid market continues to grow. Many consumers are still unaware of the benefits of a prepaid card.

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