First Annapolis forecasts that U.S. open-loop prepaid revenue will reach $4.5 billion in 2013, up from $3.8 billion in 2012.
Historically, growth rates on prepaid load volume, transactions, and revenue have all exceeded 15%, making it one of the payments industry’s highest growth products. This trend is driven by increasing consumer adoption of general purpose reloadable (GPR) products, which accounted for an estimated 42% of 2012 total prepaid revenue. The GPR segment has received additional attention following the Durbin Amendment.
The interchange exemption has made the cards more appealing to bank issuers, which have positioned the product as a checking account alternative. By 2017, GPR revenue is estimated to be nearly half of total prepaid revenue. Overall prepaid revenue is expected to grow at a 14.7% CAGR over the next five years.
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