The Contenders: Prepaid Debit and Payroll Cards Reach Ubiquity
Report Summary
The Contenders: Prepaid Debit and Payroll Cards Reach Ubiquity
For prepaid debit and payroll cards, growth prevails as competition increases and a complex regulatory environment presents new challenges.
Boston, November 14, 2012 – A new report from Aite Group provides an in-depth look at the U.S. prepaid debit card and payroll markets. The report includes market share information, current and projected gross dollar volume for load and active cards, and product pricing; it also discusses noteworthy product innovations and provides an overview of the current regulatory environment. It is based on more than 125 June to October 2012 Aite Group interviews with senior leaders in the industry.
The market for prepaid debit cards and payroll card products continues to grow at lightning speed, with products racing to compete for top-of-wallet position among mainstream consumers. The compound annual growth rate for prepaid debit and payroll cards will increase 19.9% per year from 2010 to 2016. In the midst of this growth, the regulatory environment has become much more complex over the past year, requiring extra resources and focus by all providers in the ecosystem. Although the market outlook is rosy, market pressure from regulators and competitors will force some smaller players to make difficult decisions and perhaps exit the market. Larger players can take advantage by scooping up valuable resources and skill sets by purchasing smaller companies.
“Navigating regulatory waters will be tricky at best, requiring industry players and regulators to consider standardizing practices and procedures where possible,” says Madeline K. Aufseeser, senior analyst with Aite Group and author of this report. “Prepaid providers will need to keep a sharp eye on the ball relative to product pricing, regulatory pressure, and consumer behavior. Programs with high-cost structures will suffer, and new entrants will need to make huge marketing investments to acquire consumers quickly.”
Prepaid debit and payroll card players mentioned in this report are: 7-Eleven, AccountNow, Ace Cash Express, ADP, American Express, Bank of America, BB&T, Better ATM Services, Blackhawk Network, Capital One, Cardtronics, Consumer Financial Protection Bureau, Citicorp, Comdata, Costco, Diebold, Discover, Dollar General, Family Dollar, FDIC, Federal Reserve Bank, Federal Financial Institutions Examination Council, FinCEN, First Data, FIS, FSV Payment Systems, GTech (Lottimatica), GE, Georgia Lottery, Green Dot, H&R Block, i2c, InComm, Intuit, Jackson Hewitt, JPMorgan Chase, Kroger, MasterCard, McDonalds, Meta Payment Systems, NCR, NetSpend, OCC, Payment Alliance International, PayPal, Plastyc, Publix, RadioShack, Regions Bank, Republic Bank, The Bancorp Bank, SaveASenior, Star Network (FDC), TransCard, TSYS, UniRush, U.S. Bank, Visa, Walgreens, Walmart, Wave Crest, Western Union, and White Castle.
This 46-page Impact Report contains 17 figures and six tables. Clients of Aite Group’s Retail Banking service can download the report.