It is widely acknowledged that payment cards in their current form can only hope to penetrate a certain portion of overall payment market. Prepaid cards offer a solution to capturing a greater share of payments and moving other payments towards payment cards. This report accurately quantifies various prepaid card programs available in order to identify future opportunities in prepaid cards.
Scope of this report

*The scope of the discussion in this report is restricted to general purpose prepaid cards issued in the banking sector.
*This report quantifies prepaid card market to identify which markets issuers are targeting at present.
*Includes comprehensive case studies for each of the markets identified and provides it’s commentary on the potential of each program.
*Concludes with it’s view on which markets offer the biggest opportunities for the issuers in the future.

Research and analysis highlights

Based on the analysis in this report, it is evident that the prepaid card market has already defined a place for itself within the payment card industry. Furthermore, while others have been identified to offer only limited opportunities, certain market segments have already proved to be capable of becoming successful in the long run.

The requirement of such programs and their success within different targeted market segments will partly depend on the fact that prepaid cards would be able to provide a better alternative to other options currently available in the market.

Players in the prepaid card market must continue to concentrate on marketing their products and making the product more easily accessible in order for prepaid cards to succeed and reach their full potential.
Key reasons to read this report

*
Understand different prepaid card programs available in the marketplace today.
*
Learn key features and characteristics of various prepaid card programs available globally.
*
Find out, which markets issuers are targeting now and should be targeting in the future.

Table of Content

Overview

Catalyst

Summary

Methodology

Table of Contents

Table of figures

Table of tables

Introduction to prepaid cards

What is this report about?

Who is the target reader?

How to use this report

Defining prepaid cards

This report will only focus on general purpose prepaid cards

Opportunities in prepaid cards

Introduction

Growth has been rapid in several markets

In the US, transaction volumes on Visa-branded prepaid cards has doubled during 2005

In Latin America, Visa-branded cards rose to 3.3 million by March 2006

In Europe, Visa-branded prepaid cards were the fastest growing payment card segment in 2006

Prepaid cards can be divided into two segments

Opportunities in prepaid cards issued directly to consumers

Teen cards have been introduced to capture the teen segment

There are two categories of teen products

Targeting the teens through the internet

The teen segment is also a potential market for POS purchases

The take-up of teen cards varies according to the market where it is issued

Teen cards issuers at a glance

Case study: Visa Buxx - surviving in the volatile US teen market

Visa Buxx issuers at a glance

The ability to go overdrawn on the card is a potential loophole

It’s Cards and Payments Team view

General purpose gift card programs are becoming widespread

Gift cards are advanced in the US

There has been growth in the number of gifts cards available outside of the US

Case study: Discover Gift Card - a gift card suitable for any occasion

It’s Cards and Payments Team view

A similar approached to gift cards has been adopted to replace traveler’s cheques

Travel card issuers at a glance

Case study: American Express Travelers Cheque Card - a safe way of carrying money abroad

The Travelers Cheque card offers additional benefits compared to traditional traveler’s cheques

The fees may prove an obstacle to take-up and there are a number of limitations

It’s Cards and Payments Team view

Virtual prepaid cards target consumers, who are wary of entering personal details online

Case study: Visa 3V card - a unique prepaid card program with virtual applications

It’s Cards and Payments Team view

There are a number of prepaid card programs aimed particularly at unbanked consumers

General purpose card issuers for the unbanked at a glance

Case study: MasterCard CashPlus Gold - a card with a multitude of applications for the unbanked

The MasterCard CashPlus Gold card offers the unbanked the facilities of a current account

However the product is costly and has usage limitations

It’s Cards and Payments Team view

Opportunities in prepaid cards issued to beneficiaries

Payroll cards have been designed as an alternatives to traditional payroll cheques

Payroll cards were first introduced in the US market

The UK has seen development in payroll cards

Case study: Bank of America Visa CashPay card - a prepaid card program for employees without a current account

It’s Cards and Payments Team view

Prepaid card programs have been adopted to enable insurance and reimbursement payouts

Case study: KLM MasterCard CashCard - a prepaid card that helps businesses to improve customer relations

It’s Cards and Payments Team view

Governments see the benefits of introducing prepaid card programs to replace paper-based processes

Prepaid card programs have been extended to provide disaster relief payouts

Case study: PKO Bank Polski Maestro Municipal card - a cost-effective alternative to distribute social benefits

Citibank Hadlowy also operates a social card program in Poland

It’s Cards and Payments Team view

Case study: American Red Cross Chase MasterCard card - a prepaid card program developed to provide disaster relief assistance

Hurricane Katrina was the major test for prepaid card programs designed to provide disaster assistance

Bank of America developed emergency relief cards based for businesses to distribute to employees

It’s Cards and Payments Team view

Conclusions

Introduction

Prepaid cards have the greatest potential where they replace a more costly alternative

The government sector arises as the prominent market to benefit from prepaid card programs

Private sector also offers numerous opportunities for prepaid card issuers

Payroll cards are the main example of prepaid cards that employers would find attractive

Prepaid cards have potential to be implemented in insurance payouts and reimbursements

Prepaid cards issued directly to consumers are likely to remain a niche market, but there are some opportunities

Travel cards present the biggest opportunity within cards issued directly to consumers area

Commercial clients may see the benefits of introducing prepaid cards for gifts, promotions and rebates

By contrast, gift cards are unlikely to appeal to consumers at large because of the fees involved

Teen and virtual cards offer limited opportunities, although capturing the teen has its benefits for issuers

High fees associated with prepaid cards aimed at the unbaked may restrict take-up of these products

However, security remains a concern and will need to be addressed

This may lead to tighter regulation of the sector

APPENDIX

Definitions

ATM-only card

Co-branded card

Credit card

Debit card

ePurse

POS terminal

Prepaid card

A card that cardholders can load up and then only spend the amount that is loaded on the card. Some prepaid cards can be reloaded, while others can be used once only. There are different types of prepaid card, ranging from ePurses to gift cards to travel cards.

Methodology

Primary research

Secondary research

Further reading

Ask the analyst

It’s consulting

Disclaimer

List of Tables

Table 1: Examples of issuers in the teen prepaid market, 2007

Table 2: Main issuers of Visa Buxx in the US, 2007

Table 3: Fees associated with Visa Buxx issued by U.S. Bank, 2007

Table 4: Examples of issuers in the travel card market, 2007

Table 5: Fees and limits for the Travelers Cheque card in the US, 2007

Table 6: Fees and limits for the 3V Visa prepaid vouchers, 2007

Table 7: Examples of issuers offering prepaid cards for the unbanked, 2007

Table 8: Fees and limits for the MasterCard CashPlus Gold cards, 2007

Table 9: Visa payroll cards issuers in the US, 2007

Table 10: Current relevant it’s publications, 2007

Table 11: Future relevant it’s publications, 2007

List of Figures

Figure 1: The two sub-categories of general purpose prepaid cards, 2007

Figure 2: Financial quiz on US Bank website teaches teens how to manage a budget in real life

For more information kindly visit
http://www.bharatbook.com/Market-Research-Reports/Opportunities-in-Prepaid-Cards.html