Report Overview
Learn more about why US consumers will spend $468 billion with their prepaid debit cards in 2023.
The new “Prepaid Cards in the US, 8th Edition” market research report presents a deeply detailed analysis of the opportunities and challenges confronting the companies participating in the prepaid card segment, whether they be card managers, marketers or issuers. Forecasts for each of the major prepaid card categories are also included.
The adaptability of prepaid debit cards is manifest in the ever-growing roster of commercial sectors finding they are the right products to solve their payables needs. The cards are more secure than checks, reloadable for ongoing use and create a direct relationship between businesses and customers or employees.
The use case for prepaid debit cards as payroll cards, healthcare spending account tools, corporate expense trackers and government payments disbursement aids continues to strengthen with growth in each of those categories. These prepaid debit cards will represent $373 billion in consumer spending in 2023.
Every segment of prepaid debit cards is growing with a softening in demand only for general purpose reloadable (GPR) cards managed by marketers, like Netspend or Green Dot.
The GPR prepaid debit card has provided an off-ramp from the use of cash-only for the 20% of Americans who are underbanked and provided an on-ramp to digital commerce for Americans who are unbanked or who do not wish to use their own credit or debit cards online. These open-loop prepaid cards, running on the major card networks, have also featured access to savings and money management tools to help create more financial opportunities for their holders.
While consumers will spend almost $100 billion in 2023 using their GPR prepaid debit cards, product growth is being hamstrung by the divergent paths taken by marketers and issuers. Some prepaid card marketers and issuers have found they can generate greater long-term revenue by folding their GPR prepaid card programs into the new account programs of their denovo banks.
These new banks attack GPR prepaid card use by offering no monthly account fees and no overdraft fees. Packaged Facts surveys have found that bank account fees are anathema to GPR cardholders so these fee-free pitches may well resonate with them.
For fintechs and issuers, bank charters facilitate access to low-cost funds (through deposits) which they pair with high-value services including automatic savings and savings accounts paying extremely high rates of interest (e.g., Chime is paying 2% on a traditional savings account). However, these new operators are banks which means that consumer unable or unwilling to participate in the banking system will continue to use GPR cards.
Packaged Facts estimates that U.S. consumers will spend $468 billion with their prepaid debit cards in 2023, up from $377 billion in 2020 and $302 billion in 2016. Another $284 billion will be spent on B2B prepaid cards.