In 2016, prepaid card market transactions reached $290 billion1 and as the industry evolves, we’re seeing a shift in industry focus and an expansion of providers.
Expansion Drives Competition
Historically, the prepaid card market has been dominated by giants like Green, H&R Block, Kaiku Finance and others. However, the significant expansion over the last few years has created opportunities for the market to become more competitive as consumers demand more of what they want from a prepaid card. Tech companies such as Square, Apple, PayPal and Venmo have developed their own prepaid offerings in an attempt to attract this group of customers.
Used across several verticals including government, financial institutions and gaming, prepaid cards or general purpose reloadable cards are projected to maintain their industry dominance in the global prepaid card industry. In the U.S., the industry is projected to reach $396 billion in transactions by 20222 and exponential growth is predicted in Australia and Europe as the retail and government sectors continue to adopt prepaid cards.
Changing Face of Consumers
From low-income and underbanked consumers, to millennials and higher-income adults, the consumers of prepaid cards have changed dramatically over the last few years.
Targeting a younger user demographic from both low-income and high-income segments will help issuers reach a larger user base, especially if offerings integrate both easy-to-access physical and convenient digital features that make account information quickly accessible.
Introducing an EML Payments general purpose reloadable card will allow you to tailor your offering to target different consumer groups, such as younger users, to win brand loyalty and drive spending.
Regulators Are Watching
As a result of the competition that has developed over the past few years, the U.S. prepaid card market has become an increasingly complicated space for both users and issuers to navigate.
New regulations for prepaid accounts that took effect on April 1 2019, indicate the Consumer Financial Protection Bureau (CFPB) plans on getting more involved as issuers grow their share of the market. Learn more about the CFPB’s new rules on prepaid accounts “New Regulations by the Consumer Financial Protection Bureau to Protect Prepaid Accounts”
Issuers can adapt to these new changes and facilitate growth by offering a convenient mix of channels for consumers. Multichannel access and tailored marketing will facilitate profitability for issuers and provide more areas for growth, and inevitably, more competition.
As current players try to grow their current market share, those looking to get a slice of the pie should jump in sooner than later. EML Payments proprietary technologies and custom solutions can help you meet changing customer needs today, and well into the future. Get in touch with our team today.
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1 The Federal Reserve
2 Business insider Intelligence Reporting