News

Prepaid expected to boom in 2012

December 26, 2011

According to CardRatings.com, 2012 will see a boom in prepaid debit cards due to increasing popularity among consumers.

The article states that in 2011 consumers loaded about $460 billion onto prepaid cards, according to research from Mercator Advisory Group. By 2016, the amount is expected to grow by nearly 50 percent to $685 billion.

Here are the four major prepaid trends expected for 2012:

Prepaid card explosion

Banks and financial institutions will target the unbanked population, as well as bank customers frustrated with fees.

Additionally, look for a host of other businesses to begin putting forth prepaid cards such as retailers, airlines, utility companies and government agencies.

Mainstream, fashionable and global

With American Express' venture into prepaid in 2011 with its Target card, the stigma historically associated with prepaid and low-income users began to subside. MasterCard Inc. also partnered with Western Union to offer reloadable cards that could be used internationally.

Building credit

In 2012, prepaid card issuers are expected to offer credit-enhancement features with prepaid cards.

The READYdebit Visa Prepaid Card already offers credit-building opportunities, such as a free monthly credit score tracker. Other issuers will follow this trend by targeting consumers with "bad" credit.

Celebrity branded cards

Despite the epic failure of the Kardashian Kard, a prepaid debit card featuring reality TV stars Kim, Khloe and Kourtney Kardashian, banks and credit cards issuers are still expected to rollout new celebrity-branded cards in 2012.

Redwood Hills Financial Group issued a card in 2011 that featured photos of cast members from the Las Vegas based reality TV show "Pawn Shop." And RushCard recruited New York Yankees baseball pro Alex Rodriguez to rollout its DYNASTY Prepaid Visa RushCard.

For more information on this topic, visit our trends/statistics research center.