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Adoption by government, enterprise drive prepaid growth

May 23, 2013

Between government and enterprise, a total of 3.6 billion open- and closed-loop prepaid cards will ship between 2013 and 2018, according to a new study by ABI Research. Additionally, ABI forecast that 53 percent of 2018 shipments will be chip enabled, up from 24 percent in 2013. The sharp rise is driven by a growing move to open loop, which is set to increase by 64 percent over the same time frame.

International networks are actively promoting prepaid in markets that have previously remained out of reach. These applications include campus cards and cards for government benefits and payments.

On the enterprise side, organizations view prepaid as a means of reducing costs by providing wages directly onto cards for migrant and temporary work forces. They are also increasing their use of prepaids to keep closer control on expense accounts.

The added security and efficiency of smart cards appeal to government and enterprise entities, given the cards' ability to reduce fraud, and greater control over spending.

"Serving the pre-paid market is not as easy as providing a simple reloadable card anymore," said research analyst Phil Sealy. "The emergence of additional functionalities, including simple banking applications such as online account applications, direct debit set-up and transfer capabilities have further driven up demand."

The entire report "Pre-paid Cards: Open & Closed Loop Solutions for Government, Retail, Corporate & the Unbanked," is available for purchase at the ABI Research website.

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