Abstract
The latest report, the final of three reports that thoroughly benchmark the
entire Prepaid Industry, provides a forecast of growth for all 33 Prepaid
Market Segments which includes the load volumes and cards issued.
The report finds that the total for load volume across all 33 Prepaid Market
Segments, including all Open and Closed Solutions, will reach $421.5 billion
by 2010. The Closed Loop market will represent $239.9 billion of that total
while Network Branded solutions will represent more than half of the entire
market at $181.6 billion.
This represents unprecedented growth for Network Branded solutions. In 2006
Network Branded solutions accounted for less than 14% of the total prepaid
dollar volume, but the Network Branded market is growing at a Compound Annual
Growth Rate (CAGR) of 53% which means that it is catching up fast since the
Closed Loop market is growing at a leisurely CAGR of 8.1%. Note, however,
that these growth rates represent just the average of the total Network
Branded and Closed Loop markets, and averages can be very deceiving. For
example, several Network Branded market segments have exceeded 100% annual
growth rates while one Closed Loop market segments exceeded 250% growth in
2006.
Tim Sloane, Director of the Debit Service for Mercator Advisory Group
and the author of the report indicates that this forecast is conservative:
"This research indicates that the Network Branded industry has the
opportunity to actually increase its growth rate beyond the predicted 53% CAGR
if Restricted Authorization Networks (RAN) and Merchant Funded Networks
overcome key obstacles and gain traction in the prepaid industry. Closed Loop
prepaid suppliers that fail to consider the impact of RAN solutions will
suffer the most, especially if they derive significant revenue from either of
the two Prepaid Incentives market segments where RAN will experience the most
growth."
This report is 54 pages long and contains 87 exhibits.
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