CPI Card Group announced quarterly earnings yesterday, indicating a leveling off of prepaid debit cards after experiencing rapid growth in the same period last year as the economy began its post Covid-19 recovery. CPI provides full details outlining their overall strong growth in their release:
“Second quarter net sales increased 22% to $113.3 million, another record sales quarter for the Company. Growth was led by the Debit and Credit segment, which benefited from strong customer demand for contactless cards and instant issuance solutions.
‘Strong customer demand for our portfolio of high-quality payment offerings drove outstanding sales growth in the second quarter’ said Scott Scheirman, President and Chief Executive Officer of CPI. ‘We continue to win with our innovative products and services and end-to-end solutions, and we are pleased to be able to increase our full-year financial outlook.’”
Continued Growth Projections for Prepaid Debit Cards
While the prepaid debit card segment shows a slight decrease from last year, CPI projects full year results to be at or near the record level sales of 2021. This matches the expectations set in Mercator’s 2022 Outlook: Prepaid which expected a more modest overall growth of 3.3% for the open loop market following the unusually high growth of 2020-21. The Mercator 2022 Outlook also expected a continued move to contactless and digital solutions which corresponds to CPI’s quarterly results and strengths in their earnings release:
“Year-to-date 2022 Business Highlights
- Generated incremental net sales from customer demand for higher-priced contactless cards, as the U.S. payment card market continues its gradual transition to contactless solutions.
- Continued to be a leading provider of eco-focused payment card solutions in the U.S. Through the end of the second quarter of 2022, the Company has sold nearly 80 million eco-focused cards since launch in late 2019.
- Experienced ongoing high demand for Card@Once® Software-as-a-Service-based instant issuance solutions. The Company has nearly 14,000 Card@Once® installations across approximately 1,900 financial institutions in the U.S.”
Overview by Jordan Hirschfield, Director, Prepaid Advisory Service at Mercator Advisory Group
