BASINGSTOKE, U.K.– With some analysts recently urging credit unions to recognize the opportunity to be had in prepaid cards, now a new study reinforces the reasons why.
The new study from Juniper Research has found the value of transactions made over prepaid cards will exceed $4.1 trillion globally in 2026, up from $2.3 trillion in 2021 - a “substantial growth of 75%,” the company stated.
By 2026, prepaid card transaction value will be just over 50% higher than that forecast for contactless payment transactions, “illustrating the importance of this market,” Juniper Research added.
“The growth in prepaid cards will be driven by the ongoing replacement of cash, as economies move increasingly towards digital payments,” it stated in releasing its findings.
According to Juniper, the research identified prepaid cards as being critical to ensuring that the unbanked are included in the rush for digital payments, and further recommends vendors focus on building robust distribution platforms that can cope with issuing cards at scale and at low cost, or “they will lose out to better equipped vendors.”
‘Significant Revenue Opportunity’
The new research, Prepaid Cards: Trends, Vendor Strategies & Market Forecasts 2022-2026, found that the growth of the prepaid market will present a significant revenue opportunity for prepaid card platforms, with fee revenue reaching over $32 billion globally in 2026, from $22 billion in 2021.
The report recommends that focusing on critical capabilities, such as restricted authorization, which enables issuers to specify where funds can be spent, will pay dividends in the longer term.
“Tools such as restricted authorization and digital issuance will enable prepaid cards to benefit from the evolution of traditional gift cards into full-blown prepaid cards, driving significant revenue,” said research author Nick Maynard.
Emerging Opportunities
The research found that while the U.S. will account for over 43% of global transaction values in 2026, there are other significant opportunities emerging. “China is seeing increasing prepaid use, and as international tourism recovers, prepaid cards for travel money can benefit,” according to Juniper.
The report also highlighted emerging markets as a key area of interest and recommended that platforms form partnerships now in order to best exploit future opportunities.
CUToday.info has reported extensively on prepaid cards. For additional reporting, just search “prepaid” in the CUToday.info search engine.