BASINGSTOKE, U.K.– The value of digital prepaid card transactions will exceed $3.98 trillion globally by 2028, up from $528.7 billion in 2023, according to a new study from Juniper Research.
A digital prepaid card is a virtual form of a prepaid card that exists entirely in digital format and can be accessed through a mobile app or online platform.
According to the Juniper forecast, by 2028 the value of digital prepaid card transactions will represent just under 60% of total prepaid cards spend, up from 15% in 2023, “demonstrating the rapid growth of digitization.”
“It also reflects the greater use of digitally issued open-loop prepaid cards as loyalty rewards; replacing more traditional gift cards,” Juniper said. “Open-loop systems, where payments can be made anywhere cards are accepted, will lead to an increasingly blurred line between prepaid cards and gift cards. This will make the much wider loyalty market increasingly addressable for prepaid card vendors, compared with the closed-loop system, where payments can only be made at specific vendors.”
New Growth Markets
In addition, Juniper is forecasting:
- The number of prepaid cards issued digitally is expected to surpass 940 million by 2028.
- Prepaid cards are highly appealing to the unbanked; offering the functionality of payment cards without the need of an account with a financial institution.
The Key Issue
“Financial inclusion remains a key issue for the millions of unbanked and underbanked across the world,” Juniper said. “However, advances in digitalization, smartphone availability, and the ease with which vendors can now issue prepaid cards digitally and instantly, mean that financial inclusion is within near reach of a growing number of users.”
Added research co-author Nick Maynard, “Financial inclusion use cases can significantly accelerate the success of prepaid cards, but vendors must keep the costs very low to ensure prepaid cards remain competitive for these use cases versus mobile money apps or central bank digital currencies.”
The full research can be found here.
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