Prepaid and Gift Cards - US - June 2010
Although slowed somewhat by the recent recession, the gift and prepaid card business is starting to gain momentum again and is forecast to continue to show continued strong growth. Demographic trends in the United States are also benefiting the industry. The large number of un- and underbanked households in this country represent a tremendous market for prepaid cards; people who can’t afford or refuse to pay fees associated with bank account ownership are ripe for this product – and not many have been introduced to it.
Teens and college students who, thanks to the Credit CARD Act are no longer able to obtain credit cards, are also a potentially huge market – as long as their parents can be sold on the benefits. That shouldn’t be difficult, however, since the cards eliminate the need for parents to provide their own credit cards when their kids want to go shopping at either a brick-and-mortar store or online. Targeting both these groups will be especially important to card issuers as both are aiming for more economically robust futures that may very well include the need for more profitable bank relationships.
The themes that are reflected in this report include:
- How technology is changing the nature of the prepaid card industry
- The importance of segmented marketing to the successful promotion of these products
- The impact of changing demographics on the card industry
- How card issuers need to adapt to the changing economy in order to keep their product viable
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