Prepaid and Gift Cards in the U.S., 5th Edition

Sep 19, 2016
174 Pages - Pub ID: LA5916750
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Prepaid and Gift Cards in the U.S., 5th Edition

Prepaid cards continue to expand their occasions for use, further penetrating existing market segments while pursuing new ones. While consumer general-purpose prepaid cards and open-loop gift cards continue to gather steam, they are just two of several card segments exhibiting positive growth momentum. While regulatory smoke may cloud the view, Packaged Facts expects prepaid market growth to handily outpace that registered by credit card and debit cards. The retail space, dominated by smaller bank issuers, provides room for pricing latitude; while payroll and government-administered cards allow national banks to flex their scale muscle. In aggregate, prepaid cards are helping cash-using consumer holdouts to transact electronically, even while demographics have broadened to include a higher proportion of banked users.

Prepaid and Gift Cards in the U.S. provides industry participants with a wealth of insights to help them navigate this quickly changing and growing market: The report:
  • Provides a market size and forecast for the prepaid card market, including trended purchase volume for general use (open-loop) and private label (closed-loop) prepaid cards, by type; a market size for government-administered prepaid cards, by type; and for gift cards, by occasion and retailer card type and by consumer vs. employee dollar value.
  • Identifies and interprets key prepaid usage metrics, including cardholder usage costs, monthly spend, monthly purchase, ATM withdrawal, and reload transactions, and length of card ownership. It also assesses the degree that direct deposit and HH income influences these above metrics.
  • Gauges (reloadable and non-reloadable) prepaid card and gift card usage trends during 2011-2016, breaking prepaid card usage down by card network; banked status; remittance, debit card and credit card use; cash and money order bill payment usage; bill payment preferences; credit score; and mobile payment method.
  • Assesses general-purpose reloadable prepaid card usage rationales across five categories: online and in-store purchases; P2P, bill payment and check writing; discounts and rewards; financial management features; and finding, deposit and transfer methods.
  • Studies reasons for choosing general-purpose reloadable prepaid cards, including usage cost; overdraft fee avoidance and debt management; credit and bank account substitution; breadth of acceptance; and reloading method.
  • Ranks general-purpose reloadable prepaid cards used and used most by card brand, segmented by direct deposit use; and prepaid cards by network brand, segmented by banked status and credit score.
  • Explores prepaid card marketer and issuer strategies, including American Express, Blackhawk Network, Bofl Holding, The Bancorp Bank, Green Dot, MetBank and NetSpend. Analysis includes competitive positioning, new product introductions, company innovations, and trended performance analysis. Heavy emphasis is placed on add-value proprietary estimates for gross dollar volume and other metrics otherwise not published by included industry participants.
  • Explores a variety of prepaid card industry challenges and solutions, including regulatory issues, pricing and profit factors, broadening the target audience, bank account competition, and fraud.
Chapter 1: Executive Summary
Report Scope
Report Summary
Market Size and Forecast
Challenges & Opportunities
Prepaid Card Usage Trends
Prepaid Card Usage Rationales
Prepaid Card Brands
Prepaid Card Cost, Usage Method & Spend Analysis
Gift Card Usage and Purchasing Trends
Prepaid Card Marketers and Issuers
American Express
Blackhawk Network, Inc.
BofI Holding, Inc.
The Bancorp Bank
Green Dot
MetaBank
NetSpend
Chapter 2: Introduction and Overview
Market segmentation
Types of prepaid cards
Categorization according to use
Fees
Chapter 3: Market Size and Forecast
U.S. prepaid card market size and forecast
Table 3-1: U.S. Prepaid Card Market Size and Forecast, 2012-2018
“Open-loop” prepaid cards
Table 3-2: U.S. Open-Loop Prepaid Card Market Size and Forecast, by Type, 2012-2018
“Closed-loop” prepaid cards
Table 3-3: U.S. Closed-Loop Prepaid Card Market Size and Forecast, by Type, 2012-2018
Government-administered prepaid cards
Government prepaid card market size
!Unexpected End of Formula
Table 3-5: Government Benefit Payments Disbursed Via Prepaid Card: Federal vs. State/Local Programs, 2012-2015
Table 3-6: State Benefit Payments Programs Offering Prepaid Card Disbursement Option, 2014-2015
Table 3-7: Unemployment Insurance Prepaid Card Usage, by State, Issuer and Card Network, 2016
Comerica and U.S. Bank dominate government cards
Table 3-8: Comerica Incorporated: Government Prepaid Card Deposits, State vs. Federal, 2011-2016
Interchange analysis
Table 3-9: Government-Administered Prepaid Card Purchase Volume and Interchange Fees, 2012-2015
Gift cards
Gift card market size
Table 3-10: Spending on Gift Cards: Dollar Share: Giving to Others, by Occasion; Giving to Self; and Receiving from Employer, 2016
Chapter 4: Challenges and Opportunities
Be of good cheer
Don't let regulation make you blue
The CFPB is not the only game in town
Broadening the target audience
Targeting the gig economy
Employee rewards and incentives
The tax card cometh
Table 4-1: Tax Services and Prepaid Card Brands, 2016
Retention, retention, retention
Reloading with direct deposit: no longer as important to card retention?
Pricing and profit trends
Reduced pricing pressure
Rewards and incentives on the upswing
Cardholder financial management a win-win
Low-cost bank accounts a serious threat, but do they make money?
Fraud and loss
Chapter 5: Prepaid Card Usage Trends
Trends over time
Reloadable & non-reloadable prepaid card use: 2013-2016
Table 5-1: Percentage Use of General-Purpose Prepaid Cards: Reloadable and Non-Reloadable, 2013-2016
Table 5-2: Percentage Use of General-Purpose Prepaid Cards, by Card Network Brand, 2013-2016
Reloadable general-purpose prepaid card use: 2014-2016
Table 5-3: Percentage Use of Reloadable Prepaid Cards, by Gender, Age, HH Income and Race/Ethnicity: 2014 vs. 2016
Table 5-4: Percentage Use of Reloadable Prepaid Cards, by Banked Status, Bank Usage Status, Credit Card/Debit Card Users, Car Title Loan Users, Smartphone Users and Remitters: 2014 vs. 2016
Table 5-5: Percentage Use of Reloadable Prepaid Cards, by Cash and Money Order Bill Payment Preference: 2014 vs. 2016
Credit score
Table 5-6: Vantage Score Segmentation: Reloadable Prepaid Card Users and Non-Users, 2016
Banked status, remittance use and mobile payment methods
Fully banked, underbanked and unbanked
Table 5-7: Banked, Fully Banked, Underbanked and Unbanked: Reloadable Prepaid Card Users and Non-Users, by HH Income, 2015
Table 5-8: Reloadable Prepaid Card Users and Non-Users: Share of Banked, Fully Banked, Underbanked and Unbanked, by HH Income, 2015
Table 5-9: Banked, Fully Banked, Underbanked and Unbanked: Reloadable Prepaid Card Users and Non-Users, by Age, 2015
Table 5-10: Banked, Fully Banked, Underbanked and Unbanked: Reloadable Prepaid Card Users and Non-Users, by Race/Ethnicity, 2015
Remittances
Table 5-11: Remitters, by Reloadable Prepaid Card Use and Demographic, 2015
Mobile payment methods
Table 5-12: Mobile Payment Method, by Type: Reloadable Prepaid Card Users and Non-Users, 2016
Bill payment preferences
Table 5-13: Bill Payment Preferences, by Type: Reloadable Prepaid Card Users and Non-Users, 2016
Chapter 6: Prepaid Card Usage Rationales
Prepaid card features: usage and importance
Online and in-store purchases
Table 6-1: Reloadable General-Purpose Prepaid Card Features Used and Used Most: Online and In-Store Purchases, by HH Income, 2016
P2P, bill payment and check writing
Table 6-2: Reloadable General-Purpose Prepaid Features Used and Used Most: P2P, Bill Payment and Check Writing, by HH Income, 2016
Discounts and rewards
Table 6-3: Reloadable General-Purpose Prepaid Card Features Used and Used Most: Discounts and Rewards, by HH Income, 2016
Financial management features
Table 6-4: Reloadable General-Purpose Prepaid Card Features Used and Used Most: Financial Management Features, by HH Income, 2016
Funding, deposit and transfer methods
Table 6-5: Reloadable General-Purpose Card Features Used and Used Most: Funding, Deposit and Transfer Methods, by HH Income, 2016
Reasons for choosing prepaid cards
Costs associated with card of top importance when choosing card
Table 6-6: Reloadable General-Purpose Prepaid Card Users: Cost Factors Important to Choosing Card, by HH Income and Direct Deposit Status, 2016
Card usage factors
Table 6-7: Reloadable General-Purpose Prepaid Card Users: Usage Factors Important to Choosing Card, by HH Income and Direct Deposit Status, 2016
A substitute for a credit card? Yes. For a bank account? Not so much.
Table 6-8: Reloadable General-Purpose Prepaid Card Users: Importance of Credit Quality & Credit Card and Bank Account Substitute When Choosing Card, by HH Income and Direct Deposit Status, 2016
Chapter 7: Prepaid Card Brands
Prepaid card network brands
Table 7-1: Percentage Use of Prepaid Cards, by Card Network, 2013-2016
Demographic analysis
Table 7-2: Prepaid Card User Share, by Network Brand: Gender, Age, HH Income and Race/Ethnicity, 2016
Banked status, other payment cards and credit score
Table 7-3: Prepaid Card User Share, by Network Brand: Banked Status, Bank Usage Status, Credit Card/Debit Card Use and VantageScore Segment, 2016
Prepaid card marketer brands
Prepaid cards used and used most
Table 7-4: Reloadable Prepaid Cards: Use and Use Most, by Card Marketer, 2016
Table 7-5: Prepaid Cards: Use and Use Most, by HH Income and Card Marketer, 2016
Table 7-6: Prepaid Cards: Use Most, by Direct Deposit Status and Card Marketer, 2016
Chapter 8: Prepaid Card Cost, Usage Method & Spend Analysis
Introduction
Monthly usage, spend and costs
Table 8-1: Reloadable Prepaid Card Reload, ATM Withdrawal, Direct Deposit and Purchase Metrics, 2016
Effect of HH income on card usage, spend and costs
Table 8-2: Reloadable Prepaid Card Reload, ATM Withdrawal, Direct Deposit and Purchase Metrics, by HH Income, 2016
Effect of direct deposit on card usage, spend and costs
Table 8-3: Reloadable Prepaid Card Reload, ATM Withdrawal, Direct Deposit and Purchase Metrics, by Direct Deposit Status, 2016
Chapter 9: Gift Card Usage and Purchasing Trends
Gift card giving
Top occasions, by dollar value
Table 9-1: Spending on Gift Cards: Dollar Share: Giving to Others, by Occasion; Giving to Self; and Receiving from Employer, 2016
Top givers, by dollar value
Table 9-2: Spending on Gift Cards for Others: Dollar Share, by Demographic, 2016
Table 9-3: Spending on Gift Cards for Self: Dollar Share, by Demographic, 2016
Gift card retailer segmentation analysis
Table 9-4: U.S. Adult Gift Card Purchases: Percent Purchasing, by Retail Segment & Card Brand, 2011-2016
Table 9-5: U.S. Adult Gift Card Purchases: Dollar Value, by Retail Segment & Card Brand, 2011-2016
Table 9-6: U.S. Adult Gift Card Purchases: Per-Person Dollar Value, by Retail Segment & Card Brand, 2011-2016
Gift Card Usage Rationales
Table 9-7: Rationales for Giving Gift Cards to Others, 2016
Gift Card Distribution Attitudes
Table 9-8: Gift Card Distribution, Redemption and Mobile Wallet and Payment Usage, 2016113
Demographic analysis
Table 9-9: Gift Card Distribution, Redemption and Mobile Wallet and Payment Usage, by Gender, Age and HH Income, 2016
Chapter 10: Prepaid Card Marketer & Issuer Strategies
American Express
Success and accomplishments
Change of tack
Table 10-1: American Express: Travelers Check and Prepaid Product Metrics, 2011-2015
Blackhawk Network, Inc.
Retail products
Retail distribution
Table 10-2: Blackhawk Network Holdings: Retail Distribution Locations, Retail Distribution Partners and Content Partners, U.S. and International, 2013-2015
Table 10-3: Blackhawk Network Holdings: Revenue by Major Distributor and Content Provider, 2012 vs. 2015
Digital innovation
Table 10-4: Blackhawk Network Holdings: Digital Share of Transaction Dollar Volume, 2012-2015
Bank and card network partners
Table 10-5: Blackhawk Network Holdings: Revenue from Open-Loop Products and MetaBank, 2013-2015
Incentives segment
Table 10-6: Blackhawk Network Holdings: Incentives & Rewards Acquisition History ,2013-2016
Performance trends
Table 10-7: Blackhawk Network Holdings: Revenue by Segment, 2012-2015
Table 10-8: Blackhawk Network Holdings: Transaction Dollar Volume, Transactions and Average Value, by Segment, 2012-2015
Table 10-9: Blackhawk Network Holdings: U.S. Transaction Dollar Volume, by Segment and Product, 2012-2015
Table 10-10: Blackhawk Network Holdings: U.S. Revenue by Segment and Product Type, 2012-2015
Table 10-11: Blackhawk Network Holdings: U.S. Revenue Share by Segment and Product Type, 2012-2015
BofI Holding, Inc.
Prepaid cards
Tax refund cards are about more than just cards
Performance trends: H& R Block Emerald Card
Table 10-12: H& R Block Emerald Card and Refund Transfer Revenue; Emerald Advance Revenue and Balances, 2012-2016
Table 10-13: H& R Block Emerald Card: Per Card Deposits and Revenue, 2012-2016
The Bancorp Bank
Troubles in the rear view mirror?
Card programs
Table 10-14: The Bancorp: Prepaid Cards Issued, by Brand, Program Manager and Card Network, 2016
Performance trends
Table 10-15: The Bancorp: Active Cards, Gross Dollar Volume, and Gross Dollar Volume per Card, 2011-2015
Table 10-16: The Bancorp: Card- and Deposit-Related Income, by Type, 2011-2015
Table 10-17: The Bancorp: Per Card Prepaid Fees, 2011-2015
Green Dot
Competitive positioning
Table 10-18: Green Dot Inc. Product Introductions and Initiatives, 2013-2016
Product and services
Table 10-19: Green Dot Inc.: Prepaid Cards Issued, by Brand, 2016
Table 10-20: Green Dot Inc.: Product Revenue, by Segment, 2015
Retail distribution
Table 10-21: Green Dot Inc. Product Distribution Channels, 2016
Table 10-22: Walmart and Other Retailer Share of Green Dot Revenue, 2011-2015
Key card trends
Table 10-23: Green Dot Prepaid Card Trends: Active Cards, Reloads, Gross Dollar Value,
Purchase Value and Deposits, 2011-2015
Table 10-24: Green Dot Prepaid Trends Per Active Card: Reloads, Gross Dollar Value,
Purchase Value and Deposits, 2011-2015*
Table 10-25: Green Dot Direct Deposit as Percent of Gross Dollar Value, Q2 2014-2016
Table 10-26: Green Dot Direct Deposit as Percent of Active Cardholders, 2013, 2015 and 2016
Table 10-27: Green Dot Gross Dollar Value and Active Cards: Direct Deposit Share, Q1 2015vs. Q1 2016
Table 10-28: Green Dot Prepaid Trends: Average General-Purpose Reloadable Card Lifetime,2011-2015
Performance summary
Table 10-29: Green Dot Operating Revenue Trends: Card/Fee, Cash Transfer and Interchange,2011-2015
MetaBank
Table 10-30: Meta Financial: Acquisitions and Partnerships, 2015-2016
Performance trends
Table 10-31: MetaBank: Prepaid Cards Issued, by Brand, Program Manager and Card Network,2016
Table 10-32: MetaBank: Card Fees, Interchange Fees, and Prepaid Card Deposits and GDV,2011-2015
Table 10-33: MetaBank: Prepaid Card GDV, by Segment, 2011-2015
NetSpend
Competitive positioning
Table 10-34: Total System Services: Accounts on File, by Type, 2011-2015
Retail distribution
Table 10-35: NetSpend: Revenue Share, by Distribution Channel: 2011-2014
Card brands
Table 10-36: NetSpend Prepaid Card Programs, by Type, Issuer and Card Network, 2016
Performance trends
Table 10-37: NetSpend: Revenue, Active Cards, and Gross Dollar Volume, by Direct Deposit,2011-2015
Appendix
Consumer survey methodology
Market size methodology
Terms and definitions

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