First Data Corp. , a payments processor, released its analysis of December data on closed-loop prepaid card on January 17. While the company did not release any figures as to the size of the market, it did provide directional information on same-merchant activations, reloads, transactions, and redemptions for U.S. merchants.
Consumers continued to reload closed loop gift cards in December with reload dollar volume growth at 47.0% and transaction growth at 50.9%. Reload transaction growth at Specialty Retail merchants posted a yearly high of 5.2% as many consumers reloaded these previously-used gift cards to support their holiday spending.
The company also reported a modest increase in dollar volume growth and said that cardholders may have used gift cards for budgeting purposes. This assessment echoes Mercator’s data from its CustomerMonitor Survey Series which suggests that as much as 16 percent of the population use prepaid cards for budgeting.