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COVID-19 Impact Reveals Disparate Effect on Different Prepaid Segments
Thursday, December 17, 2020
Mercator Advisory Group's 17th annual prepaid market forecast clocks some big hits -- and some growth.
BOSTON, Dec. 10, 2020 /PRNewswire-PRWeb/ -- Mercator Advisory Group's most recent report, its 17th Annual U.S. Open-Loop Prepaid Cards Market Forecast 2020-2024, Part II, reveals that some verticals in open-loop prepaid show the capacity for growth, while others, including Campus, show drastic, and likely secular decline.
The Mercator Advisory Group forecast is derived from market knowledge gained through research done by Mercator since 2004.
However, even this archive of more than a decade of historical data provides little guidance on the future of markets that are growing rapidly and facing disruptive technology and services as well as historic new regulatory constraints. These factors, combined with dependence on funding sources tightly coupled to the economy and consumer sentiment, mean that the prepaid market is volatile and variable from one segment to another.
Considering the robust 2019 economy and new regulations that started April 1, 2019, followed by the social and economic disruption of 2020's COVID-19 pandemic, the potential for dramatic shifts among prepaid card segments is readily apparent. Our findings for 2019, and our forecast for the future predict just this kind of volatility for some segments.
"Government funding is not necessary to the health of any given open-loop prepaid vertical, even if it doesn't hurt," said Theodore Iacobuzio, vice president and managing director Mercator's research division. "For example, Open-Loop Restricted Access Network loads show secular growth into the new decade's middle years."
Highlights of this report include:
-- This is the second part of Mercator's annual Prepaid Open-Loop Market
Forecast, and covers all kinds of open loop cards except those in the
Cash Access category, that were covered in part one.
-- The open-loop prepaid market is highly segmented, as the industry
develops different types of cards for different use cases, ranging from
campus cards to in-store Restricted Access Network cards.
-- Most of these segments showed some growth during 2019, owing to the
strong economy in that year, though some segments were showing weakness
that would be exacerbated by the arrival of the COVID-19 virus toward
the end of the first quarter of 2020.
-- While Mercator Advisory Group forecasts that growth in overall open loop
prepaid loads in the United States at 4.1% through 2024, reaching a
total of $466.2 billion, some segments, especially outside the Cash
Access category, have suffered seriously under the impact of the virus
and will take years to recover, if they recover at all.
-- Government attitudes regarding prepaid cards as disbursal mechanisms for
state funding vary, and in themselves represent exogenous events as
serious as COVID-19 itself for the state of the business.
-- It is safe to say that some categories of open loop prepaid cards will
change in much the same way that the overall economy is going to change,
and is currently changing, under the impact of the virus.
This report is 25 pages long and contains 16 exhibits.
Companies mentioned in the survey results shown include: Green Dot, Netspend, Monzo, Chime, Visa, Mastercard, Discover and American Express.
Members of Mercator Advisory Group Prepaid Service have access to this report as well as the upcoming research for the year ahead, presentations, analyst access and other membership benefits.
Please visit us online at http://www.mercatoradvisorygroup.com.
For more information and media inquiries, please call Mercator Advisory Group's main line: 1-781-419-1700 or send email to media@mercatoradvisorgroup.com.
For free industry news, opinions, research, company information, and more, visit us at http://www.PaymentsJournal.com.
Follow us on Twitter @ http://twitter.com/MercatorAdvisor.
About Mercator Advisory Group
Mercator Advisory Group is the leading independent research and advisory services firm exclusively focused on the payments and banking industries. We deliver pragmatic and timely research and advice designed to help our clients uncover the most lucrative opportunities to maximize revenue growth and contain costs. Our clients range from the world's largest payment issuers, acquirers, processors, merchants and associations to leading technology providers and investors. Mercator Advisory Group is also the publisher of the online payments and banking news and information portal PaymentsJournal.com.
Media Contact
Karen Yetter, Mercator Advisory Group, 781-419-1700, kyetter@mercatoradvisorygroup.com
Twitter
SOURCE Mercator Advisory Group
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