Closed-loop prepaid cards: $17.3B forecast

Closed-loop consumer incentive prepaid cards are entering a period of renewed growth, according to new research from Mercator Advisory Group. After a modest 2% increase in load volume in 2018, reaching $14.2 billion, the segment is expected to accelerate. Mercator forecasts a compound annual growth rate of 5% through 2022, pushing total loads to $17.3 billion. The findings are detailed in the firm’s report, ’16th Annual U.S. Closed-Loop Prepaid Cards Market Forecasts, 2018–2022.’

Key growth drivers

Three primary factors are fueling the expansion of closed-loop consumer incentive cards, all centered on the retailer-consumer relationship. First, both retailers and consumers are showing greater appreciation for branded currency, recognizing its value as a targeted incentive. Second, improved technology now allows incentive cards to be more tightly integrated with existing rewards programs, enhancing their utility and appeal. Third, digital delivery channels—including SMS, email, and mobile wallets—have increased the immediacy and personalization of card distribution, making these incentives more effective and timely.

Market dynamics and opportunities

The Mercator report analyzes load dollar volume across all closed-loop prepaid segments, identifying those approaching market saturation as well as those with ongoing growth potential. However, the report cautions that economic, political, and consumer behavior factors will materially influence which segments grow and which decline. As a result, prepaid providers are advised to evaluate their current offerings and diversify in response to shifting opportunities.

Emerging growth markets

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