-
- Pre-paid and Gift Cards - US - January 2012
Why not try these options:
Call us on
The prepaid and gift card business is experiencing a comeback as the economy slowly recovers from the recent recession. Prepaid cards are among the fastest-growing method of payments, with the number of transactions increasing nearly 23% per year between 2006 and 2009 (source: 2010 Federal Reserve Payments Study).
Use of these cards has expanded beyond general reloadable cards (GPRs) and they are now used by corporations and government agencies to pay salaries and benefits, saving these organizations money and making it easier for people—especially the unbanked—to gain access to their money. Gift cards are benefiting from the improving economy, although the precariousness of the recovery is certainly having a dampening effect.
Demographics and technology are also positive factors for both sectors, as growth in un- and underbanked populations, historically heavy users of prepaid cards, is growing, and as mobile technology increases in presence and sophistication.
What you need to know:
- In light of the struggling economy, what are the near term prospects for the prepaid and gift card industries?
- How might legislation restricting interchange fees for debit card transactions help the prospects for prepaid card usage?
- What are the sectors of the economy or types of corporations that will be the primary drivers of growth?
- What do consumers think? Might their disenchantment with banks and the entire banking industry cause them to look for banking alternatives?
- The un- and underbanked have been the mainstay of the prepaid card business, and that population has historically been made up largely of minorities and immigrants. What are the forecasts for these groups going forward?
- Teens are also a lucrative market for prepaid cards. Will this continue or are tween and teen preferences changing?
- How are companies using prepaid and gift cards as incentives and in loyalty programs?
Scope and Themes
What you need to know
Data sources
Consumer study data
Advertising creative
Abbreviations
Terms
Companies mentioned in this report:
Executive Summary
Industry overview
The economy is feeling a bit better
The un- and underbanked are attractive—and growing—segments
New legislation is challenging banks—and helping prepaid cards
Payroll cards are more popular
Egift cards are here
Social networking sites are a new marketing channel
Teens are an important market
Opportunities and challenges – examples from Mintel’s data in this report
Insights and Opportunities
Key points
U.S. government and individual state agencies use prepaid cards to pay benefits
Payroll cards are set to grow
Prepaid cards offer opportunity to make up lost revenue
Banks are vulnerable to customer defections
The un- and underbanked remain an attractive segment
Mobile gift cards will grow as smartphone sales grow
Prepaid and gift cards are increasing in popularity as incentives
There is no single market of prepaid cardholders
Figure 1: Satisfaction with prepaid debit card, November 2011
Inspire Insights
Inspire Trend: “Prepare for the Worst”
Inspire Trend: “Totophobia”
Market Size
Key points
Load volume and sales volume predicted to explode
Closed-loop cards not dead yet
Figure 2: Total dollars loaded onto closed-loop cards, 2003-10
2011 sales of gift cards are predicted to improve
Volume breakdown of prepaid branded cards
Figure 3: Volume breakdown for branded prepaid cards, 2009
Competitive Context
Key points
Prepaid transactions are growing faster than any competing payment type
Figure 4: Consumer use of various payment types, 2006-09
More banks are likely to enter prepaid market
Credit unions are becoming more popular
Marketing Channels
Key points
The U.S. Post Office is getting in on prepaid cards
Social networking sites are flexing their selling muscles
Market Drivers
Key points
New legislation is making offering prepaid cards more attractive to banks
Increasing bank fees will spur interest in prepaid cards
The economy may be loosening up
Figure 5: National unemployment rate, by month, 2011
Growth in the un- and underbanked segments
Minorities could fuel growth
Figure 6: Percentage of various minority group households that are unbanked, 2009
Figure 7: U.S. population, by race and ethnicity, 2000-10
Figure 8: U.S. population growth, by race, 2005 and 2050
Larger low-income population
Parents like prepaid cards for their teens
Figure 9: U.S. population, by age, 2006, 2011 and 2016 (projected)
Figure 10: Attitudes toward credit cards and debt, January 2006-December 2010
The popularity of ecommerce will drive prepaid card use
Figure 11: Estimated quarterly retail sales: total and ecommerce, Q3 2010 – Q3 2011
Leading Companies
Key points
Figure 12: Prepaid and payroll cards, largest issuers by volume, 2009
NetSpend is largest player in combined prepaid/payroll card volume
Green Dot is the first prepaid card issuer to buy a bank
American Express enters the prepaid fray
Innovation and Innovators
Key points
Egift cards
Some auto insurers are allowing customers to pay via prepaid cards
Prepaid card specifically for Hispanics is introduced in Iowa
Investment companies begin using gift cards as incentives
Cash back rewards make prepaid cards more like credit and debit cards
An incentive to purchase gift cards
Community gift cards help strengthen local economies
Marketing Strategies
Key points
Print advertising
H&R Block
Figure 13: H&R Block MasterCard print ad, March 2011
Bankers Trust
Figure 14: Bankers Trust print ad, 2011
TD Bank
Figure 15: TD Bank print ad, 2011
Direct mail advertising
SmartyPig
Figure 16: SmartyPig direct mail ad, 2011
Urban Trust
Figure 17: Urban Trust Bank Insight MasterCard direct mail ad, 2011
Palm Desert National Bank
Figure 18: Palm Desert National Bank direct mail ad, January 2011
American Express
Figure 19: American Express direct mail ad, March 2011
Online and email advertising
TD Ameritrade
Figure 20: TD Ameritrade email ad, 2011
Figure 21: TD Ameritrade email ad, 2011
NetSpend Visa
Figure 22: NetSpend email ad, 2011
Green Dot
Figure 23: Green Dot email ad, May 2011
American Express
Figure 24: American Express online ad, October 2011
MasterCard
Figure 25: MasterCard online ad, September 2011
RushCard Visa
Figure 26: Rushcard Visa online ad, October 2011
The Consumer—Cards Purchased and Received
Key points
Number of gift/prepaid cards received in the last 12 months
Figure 27: Number of gift/prepaid cards received in the last 12 months, by gender, September 2011
Lifestage milestones a trigger for giftcard usage?
Figure 28: Number of gift/prepaid cards received in the last 12 months, by age, September 2011
What do you buy the person who has everything?
Figure 29: Number of gift/prepaid cards received in the last 12 months, by household income, September 2011
Greater use of prepaid and gift cards among couples
Figure 30: Number of gift/prepaid cards received in the last 12 months, by marital/relationship status, September 2011
Number of cards purchased
Figure 31: Number of gift/prepaid cards purchased in the last 12 months, by gender, September 2011
Scope to increase sales among grandparents
Figure 32: Number of gift/prepaid cards purchased in the last 12 months, by age, September 2011
High earners are the most likely to buy gift and prepaid cards
Figure 33: Number of gift/prepaid cards purchased in the last 12 months, by household income, September 2011
Singles are the least likely to have bought cards in the last year
Figure 34: Number of gift/prepaid cards purchased in the last 12 months, by marital/relationship status, September 2011
The Consumer—Where Cards are Purchased
Key points
Where prepaid and/or gift cards are purchased
Figure 35: Where cards were purchased in past 12 months, September 2011
Higher earners buying cards online, and for luxury purchases
Figure 36: Location where gift/prepaid cards were purchased, by household income, September 2011
Volume sales driven by gifting
Figure 37: Number of gift/prepaid cards purchased or received in the last 12 months, by location where gift/prepaid cards were purchased, September 2011
Figure 38: Number of gift/prepaid cards purchased or received in last 12 months, by location, September 2011
The Consumer—Changing Purchase Patterns
Key points
Number of cards being purchased this year vs. last year
Figure 39: Purchasing more, less or same amount of gift/prepaid cards, by age, September 2011
Reasons for purchasing fewer this year
Figure 40: Why purchased fewer gift/prepaid cards in last year, by age, September 2011
The economic strain is showing among lower earners
Figure 41: Why purchased fewer gift/prepaid cards in last year, by household income, September 2011
The Consumer—Reasons for Buying Prepaid and Gift Cards
Key points
Occasion for which prepaid and/or gift cards were purchased
Figure 42: Why gift/prepaid cards are purchased, by gender, September 2011
Lifestage dictates the reason for buying gift cards
Figure 43: Occasion for which gift/prepaid cards were purchased, by age, September 2011
Regardless of the occasion, closed-loop cards dominate sales
Figure 44: Location where gift/prepaid cards were purchased, by occasion, September 2011
Figure 45: Location where gift/prepaid cards were purchased, by occasion, September 2011
Reasons for not purchasing gift/prepaid cards
Figure 46: Reasons not purchased a gift or prepaid card in last 12 months, by gender, September 2011
Older respondents prefer more traditional types of gift
Figure 47: Reasons not purchased a gift or prepaid card in last 12 months, by age, September 2011
Appendix: Simmons Cohort Analysis
Most popular type of gift cards
Figure 48: Gift cards purchased in last 12 months, by gender, April 2010-June 2011
Figure 49: Gift cards purchased in last 12 months, by race, April 2010-June 2011
Visa is the most popular branded card
Figure 50: Gift cards purchased in last 12 months, by gender, April 2010-June 2011
Figure 51: Gift cards purchased in last 12 months, by race, April 2010-June 2011
Amount of money spent on gift cards, 2010 vs. 2011
Figure 52: Amount of money spent on gift cards, by gender, April 2009-June 2010
Figure 53: Amount of money spent on gift cards, by gender, April 2010-June 2011
Use of prepaid cards in last 12 months
Figure 54: Usage of prepaid cards, April 2010-June 2011
Most-used prepaid cards, last 12 months, 2010 vs. 2011
Figure 55: Prepaid cards used in last 12 months, April 2010-June 2011
Cluster Analysis
Traditional Users
Demographics:
Characteristics:
Opportunity:
Declining Users
Demographics
Characteristics:
Opportunity:
Tech-Savvy
Demographics:
Characteristics:
Opportunity:
Characteristic tables:
Figure 56: Gift card purchaser clusters, September 2011
Figure 57: Gift cards purchased or received, by gift card purchaser clusters, September 2011
Figure 58: Locations of gift card purchases, by gift card purchaser clusters, September 2011
Figure 59: Gift card occasions, by gift card purchaser clusters, September 2011
Figure 60: Gift card purchasing behavior, by gift card purchaser clusters, September 2011
Figure 61: Gift card motivators, by gift card purchaser clusters, September 2011
Figure 62: Gift card uses, by gift card purchaser clusters, September 2011
Demographic tables:
Figure 63: Gift card purchaser clusters, by gender, September 2011
Figure 64: Gift card purchaser clusters, by age, September 2011
Figure 65: Gift card purchaser clusters, by household income, September 2011
Figure 66: Gift card purchaser clusters, by race, September 2011
Figure 67: Gift card purchaser clusters, by Hispanic origin, September 2011
Cluster methodology:
Appendix: Trade Associations
- Amazon North America
- American Express Company (The)
- Apple, Inc
- Bain Capital LLC
- Bank of America Corporation
- CBS Corporation
- Chase Home Finance
- Citibank
- Consumer Bankers Association
- Credit Union National Association
- Discover Financial Services Inc.
- Facebook, Inc.
- Federal Deposit Insurance Corporation
- First Data Corporation
- FMR Corp.
- Groupon, Inc.
- H&R Block, Inc.
- Interactive Data Corporation
- LivingSocial
- MasterCard Incorporated
- Morgan Stanley
- National Council of Chain Restaurants (NCCR)
- National Retail Federation (NRF)
- PayPal Inc.
- Post Office Limited
- Research In Motion (USA)
- Starbucks Corporation
- TD Ameritrade Holding Corporation
- The American Bankers Association
- The American Financial Services Association
- The Boston Consulting Group Inc.
- Toronto-Dominion Bank
- TowerGroup
- U.S. Bancorp
- U.S. Bureau of Labor Statistics
- U.S. Bureau of the Census
- Visa U.S.A. Inc.
- Walmart Stores (USA)
- Wells Fargo & Company
|
Registered office :
Mintel Group Ltd. Geolocation by www.maxmind.com |