United States Prepaid Cards Market Analysis Report 2023: The Spoiler - Fintech Marketers Undercut on Price and Deliver on Features

News provided by

May 17, 2023, 21:15 ET

DUBLIN, May 17, 2023 /PRNewswire/ --

Research and Markets

The "Prepaid Cards in the US, 8th Edition" report has been added to ResearchAndMarkets.com's offering.

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.

The new "Prepaid Cards in the US" 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 such 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. The publisher surveys have found that bank account fees are anathema to GPR cardholders so these fee-free pitches may well resonate with them.

For fintech 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 consumers unable or unwilling to participate in the banking system will continue to use GPR cards.

Key Topics Covered:

CHAPTER 1: EXECUTIVE SUMMARY

Report Scope
Report Summary
Market Size and Forecast
Growth Opportunity
Coattails of Pandemic Payment Changes Continue to Affect the Use of Cash
Digital Channel for Card Acquisition and Purchasing
Tpp-Based Digital Banking Threatens GPR Prepaid Industry
Broad Characteristics of the Payments Industry
Pay Before - Prepaid
Pay Now - Cash and Pin Debit
Pay Later - Consumer Credit
Status of Traditional Consumer Payments
In 2022, Credit Card Outstanding Finally Surpassed Those of 2019
Longer Term Payment Trends Accelerated
Longer-Term Payment Trends Unabated
Government GPR Programs
US Bank's ReliaCard Mobile App
Payroll Cards
GPR Rewards
Kroger Rewards Prepaid Debit Card
The PayPal Prepaid Mastercard
Serve American Express Prepaid Debit Account
Prepaid Card Use Trends
Prepaid Card Marketer and Issuer Strategies
The Bancorp, Inc.
Green Dot Corporation
Walmart MoneyCard
The Bottom Line
Pathward Financial
Prepaid Card Programs

CHAPTER 2: MARKET SIZE AND FORECAST

US Prepaid Card Market Size and Forecast
Payment Value to Reach $468 Billion in 2023
2024 Payment Value is Forecasted at $475.3 billion
Open-Loop and Closed-Look Prepaid Card Market Size, by Card Type
GROWTH OPPORTUNITY
Sideways/Down: Consumer General-Purpose Reloadable Prepaid Cards
Long-Term Incremental Growth: Gift Cards
Strong Near-Term/Very Modest Long-Term Growth: Government Prepaid Cards
Moderate-to-Strong Growth: Healthcare Cards
Moderate Growth: Payroll Cards
Strong Growth: B2B Payments

CHAPTER 3: CHALLENGES AND OPPORTUNITIES

General-Purpose Prepaid Card Spend To Take Discretionary & Non-Discretionary Hit
Near- and Long-Term: Prepaid Cardholder Cash Preferences to Give Way Slowly
Near- and Long-Term: In-Store Purchases Pressured and Online Purchases Benefit
Near- and Long-Term: In-Store Sales Decline
Near- and Long-Term: Interchange Wins
Long-Term Winner: Payroll Cards
Long-Term Loser: Prepaid Tax Refund Cards
APP-BASED DIGITAL BANKING THREATENS GPR PREPAID INDUSTRY
The Good: Prepaid Cards Adapt to Digital Banking World
The Spoiler? Fintech Marketers Undercut on Price and Deliver on Features
In Focus: Chime
Potentially and Realistically Free to Use
Savings Innovation
The Big Picture
The Consequences of the Newest Iteration of Neobanks
In Focus: SoFi
Multiple Savings Vaults Allow for Multiple Savings Goals
SoFi's Banking Charter Fuels BaaS Growth
SoFi and Samsung

CHAPTER 4: PREPAID CARD USE TRENDS

Pandemic Prepaid Card Distribution Effect Lingers
General-Purpose Prepaid Card Use Trends: 2023
A Note About the Data
Lower-Income Adults Remain a Sweet Spot

CHAPTER 5: GENERAL-PURPOSE RELOADABLE PREPAID CARD FEATURE AND USE RATIONALES

GENERAL-PURPOSE RELOADABLE PREPAID CARD FEATURES USED
Money Movement and Payment Features: Demographic Analysis
REASONS FOR CHOOSING RELOADABLE PREPAID CARDS
Customer Service and Online Shopping Drive Card Selection
Influence of Direct Deposit on Card Use

CHAPTER 6: PREPAID CARD MARKETER & ISSUER STRATEGIES

ISSUER ASSET SIZE DRIVES PREPAID CARD MARKETER CHOICE
Note: Axos Financial
PATHWARD
Meta Bank Rebranded as Pathward
Pathward Prepaid Card Programs
The Tax Man Cometh: H&R Block Prepaid Emerald Card and Related Products
The Emerald Card Leverages Ancillary Products to Grow
Spruce Mobile Banking Offered Through Pathward
H&R Block Moving Prepaid Cardholders to its New Banking App, Spruce
THE BANCORP BANK
Specialty Lender and Prepaid Card Leader
Strong 2022 Growth Brings Bancorp to 150 Million Active Cards
Future Growth is Payments and Partners
Networks, and Card Types, 2022
But Non-Prepaid Debit Fintech Partnerships Drive Growth
Healthcare a Bright Spot
GREEN DOT CORPORATION
Market Segments
Deposit Account Programs
Key Program Brands
Key Relationship: Walmart
The Walmart MoneyCard
Savings, Budgeting, and Direct Deposit Features
Key Competitive Threat: Low-Cost App-Based Digital Banking
Key New Product: Unlimited by Green Dot
Key Service: BaaS
Apple Cash
Uber
Intuit
Wealthfront
NETSPEND
Overview

Companies Mentioned

American Express
Apple
Axos Financial
Green Dot Corporation
Intuit
Kroger
Pathward
PayPal
Samsung
SoFi
The Bancorp, Inc.
Uber
US Bank
Walmart
Wealthfront

For more information about this report visit https://www.researchandmarkets.com/r/8h8ujv

About ResearchAndMarkets.com
ResearchAndMarkets.com is the world's leading source for international market research reports and market data. We provide you with the latest data on international and regional markets, key industries, the top companies, new products and the latest trends.

Media Contact:
Research and Markets
Laura Wood
Senior Manager
[email protected]

For E.S.T Office Hours Call +1-917-300-0470
For U.S./CAN Toll Free Call +1-800-526-8630
For GMT Office Hours Call +353-1-416-8900

U.S. Fax: 646-607-1907
Fax (outside U.S.): +353-1-481-1716

Logo: https://mma.prnewswire.com/media/539438/Research_and_Markets_Logo.jpg

SOURCE Research and Markets