The prepaid market is one of the fastest growing payment card segments. According to predictions by Mercator Advisory Group, in the United States alone, the open-loop, branded prepaid market will experience an average annual market spend of US$28 billion, and the closed-loop, private label prepaid market US$171 billion between 2006 and 2009. This equates to 33 and 6% annual growth respectively. In addition, research by MasterCard estimates that spending on prepaid cards in Europe may reach US $120 billion by 2010.
Prepaid cards contain pre-loaded funds that cardholders can spend anywhere in the world where the card is accepted example a Visa or Master card will be accepted anywhere in the world where these cards are accepted. In recent years, prepaid and gift-card products like the Visa Prepaid card have increased significantly in popularity. From 2003 to 2005, the number of large merchants offering gift cards increased from 53% to 82% and spending on prepaid payment cards globally is expected to total more than US $720 billion by 2010.
An Opportunity to target the untapped debit card market
Prepaid cards provide banks an excellent opportunity to attract and retain clients, be it the untapped debit card market such as children or the clients who wish to have an additional card to enjoy convenience with security. Prepaid card products are most attractive to consumers who are:
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Too young to have a debit or credit card
- Do not have a bank account
- Unable or unwilling to use traditional banking channels such as retail branches
- Do not wish to use their existing debit or credit cards for online shopping
- Have a specific need (often time-limited) to buy products or services
Prepaid Cards also cater for many commercial applications that meet specific needs of corporate organizations. Some of these applications are payroll, commission payments, Incentives disbursements & travel & expense management.
Protection, convenience and more
Around the globe, prepaid programs support a wide range of products and services, typically targeting specific market segments with focused services. The focused nature of prepaid means issuers require highly flexible, end-to-end solutions that can quickly adapt to new market requirements and trends. From protection against unauthorized purchases, to being welcomed around the world, every Pre paid cardholder enjoys a suite of standard benefits designed for maximum peace of mind and convenience. Prepaid cards make it easy to give and receive money and can help increase sales: many consumers spend more than the original face value of their gift cards, often nearly twice as much. They can also help protect against fraud and theft: prepaid cards are more dificult to counterfeit than paper gift certificates.
Customers can enjoy the benefits of a card being:
- Powerful tool to encourage financial responsibility
- Convenient and flexible way to pay
- Safer than cash
- Parental control and peace of mind
- Wide acceptance—everywhere Visa or Master debit cards are welcome
TPS Prepaid card solution
As institutions prepare for the implementation of prepaid card programs, they must consider the full prepaid life cycle. TPS’s solution supports the full life cycle for open-loop and closed-loop product types, including Program management (establishment of business rules, processes and pricing), Customer card, account creation and management , Card inventory management, and funding (value loading) procedures etc.
TPS prepaid solution’s flexibility allows issuers to select only those components needed to support their particular requirements.
TPS offers a flexible, end-to-end prepaid solution based on more than 12 years of global experience in both consumer and corporate electronic payments. With TPS’s software and services, issuers have a viable alternative that offers flexibility and the ability to offer unique services and programs based on market needs. UBL, with the launch of UBL Wiz prepaid Debit cards, is already enjoying a whole new customer base, by issuing the prepaid cards for its account holders and non-account holders alike.
