U.S. Tops in Prepaid Cards

May 15, 2010

There's a vast untapped market for prepaid debit cards, worldwide, but in the United States especially. That's the assessment of Mercator Advisory Services, a U.S consultancy that keeps tabs on prepaid card markets.

In 2008 the top 30 markets in the world represented a potential market of $762.2 billion in prepaid cards, with the largest potential in the U.S., according to Mercator's latest global prepaid market assessment. Monies actually loaded on the cards in the U.S. that year totaled just $209.1 billion, however, the firm reports.

Prepaid debit cards, as the name implies, are debit cards that have pre-loaded value; the cards do not access individual checking account. Prepaid cards can be branded by the major card companies (American Express, Discover, MasterCard and Visa), or they can be sold as private-label (retailer) gift cards. Branded cards can be used as gift cards also, but more commonly are used for payroll, benefits, marketing incentives and government distribution programs.

These days, governments represent the largest segment of the prepaid card market, with a potential worldwide load value of $425.3 billion. Payroll cards worldwide have a market potential of $5.8 billion

Mercator sees the greatest promise for growing prepaid debit cards in industrialized nations. Outside of the U.S., Germany, Italy, France, the UK and Spain "are the world's most promising markets." Combined, these five markets represent about $405.9 billion in yearly prepaid card value, according to the firm's 2010 Prepaid Card Market Potential Ranking 2010.

50 million American households are considered "unbanked" - they have no relationships with federally insured financial institutions