Closed-loop prepaid cards are continuing to evolve beyond traditional gift-giving as retailers and brands find new ways to strengthen customer engagement and loyalty. Research from Mercator Advisory Group shows that consumer incentive cards are poised for renewed growth, driven by increased retailer interest in branded currency, tighter integration with rewards programs, and the growing use of digital delivery channels such as email, SMS, and mobile wallets. As technology improves and consumers become more comfortable with digital incentives, closed-loop prepaid products are becoming a more immediate and personalized tool for retailer-consumer interaction.
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Data for today’s episode is provided by Mercator Advisory Group’s report – 16th Annual U.S. Closed-Loop Prepaid Cards Market Forecasts, 2018–2022
- While loads in this segment only grew by 2% in 2018, up to $14.2 billion, growth is expected to accelerate
- By 2022, compound growth in closed-loop consumer incentive cards is expected to be 5%, reaching $17.3 billion
- Three factors contribute to expanded growth in closed-loop consumer incentive cards, all between retailers and consumers:
- Increased appreciation between retailers and consumers for branded currency
- Technology improvements can tie incentive cards to rewards programs better
- Digital delivery whether SMS, email, or digital wallet has increased the immediacy cards can be delivered
About the report
The report titled 16th Annual U.S. Closed-Loop Prepaid Cards Market Forecasts, 2018–2022 provides an analysis of the growth and development of the prepaid cards industry through 2022. The report examines loads, growth potential, and market dynamics in the United States across all closed-loop prepaid card segments.
Mercator Advisory Group’s forecast report identifies key segments that will continue to decline over the next few years as well as those that should see growth. However, the economy, politics, and consumer behavior will all influence which segments grow and which decline.
This report reviews and forecasts load dollar volume for closed-loop segments. This forecast highlights the segments approaching market saturation as well as those that will continue to experience annual growth.
“Prepaid providers should be evaluating their businesses and looking for ways to diversify,” commented C. Sue Brown, Director of Mercator Advisory Group’s Prepaid Advisory Service, the author of the report. “Opportunities in the prepaid market shift with economic, political, and regulatory changes. New technologies such as the internet of things, connected car, and use of prepaid for transit and tolls may provide growth markets in the years to come.”
