Reloadable prepaid debit cards are the fastest growing noncash form of payment. Transactions in 2012 topped 9 billion, and the annual growth of general-purpose reloadable prepaid cards exceeded 33%. Below you'll find data on this quickly evolving market.
The data are divided into the following sections:
Source: The Nilson Report (June 2014). The above rankings include MasterCard, Visa and Discover prepaid cards.
Prepaid cards issued by American Express include the Serve and Bluebird cards. According to a June 5, 2014 press release, American Express processed $1.9 billion in transactions in the first four months of 2014, representing an annual run rate of nearly $6 billion.
The Federal Reserve System has published a triennial study since 2001 to estimate aggregate trends in noncash payments in the United States. The FRS released its most recent study, The 2013 Federal Reserve Payments Study, on December 19, 2013.
Key results related to prepaid cards include the following:
In addition, it's estimated that retail purchases with prepaid debit cards in the U.S. in 2014 exceeded $200 billion. (Source: Forbes)
The Federal Reserve Bank of Kansas published a report in February 2014 based on data provided by NetSpend. General Purpose Reloadable Prepaid Cards: Penetration, Use, Fees, and Fraud Risks, Fumiko Hayashi and Emily Cuddy, The Federal Reserve Bank of Kansas City (February 2014). The report offers insight into how consumers use prepaid cards, including how long the cards are active, how they are loaded, and where they are used.
Life Span of a Prepaid Card: The typical length of time a prepaid debit card is in use varies based on how the user loads value onto the card. Consumers that use direct deposit on average use a prepaid card longer, with the longest average for those who receive direct deposit of government payments:
Load Statistics: The frequency with which a prepaid debit card is loaded varies significantly. The average prepaid card is reloaded with funds 1.8 times with a value per load of $285.53. Here's a breakdown on the percentage of cards and load characteristics:
Transaction Types: Purchases are by far the most common use of prepaid debit cards. ATM transactions are a distant second:
Average monthly purchase activity:
Cash Withdrawals versus Purchase Transactions:
Top 10 Merchant Categories in Transaction Volume:
Prepaid cards address a number of consumers' financial needs and preferences. A 2012 study by Bretton Woods, Inc. captured data on customer satisfaction and consumers' reasons for using prepaid cards..
What Prepaid Users Liked Most
Source: Analysis of Branded General Purpose Reloadable Prepaid Cards, Bretton Woods, Inc. (February 2012).
Average Fees Based On Card Acquisition Source
–Average Monthly Value of Fees for Cards Obtained Via the Web
–Average Monthly Value of Fees for Cards Obtained at a Retailer
–Average Monthly Value of Fees for Cards Obtained at a Financial Institution
Source: Consumers' Use of Prepaid Cards: A Transaction-Based Analysis, Stephanie M. Wilshusen, Robert M. Hunt, and James van Opstal, Federal Reserve Bank of Philadelphia; Rachel Schneider, Center for Financial Services Innovation (August 2012).
–Average monthly cardholder fees: $11.00
–Average fee composition:
Source: General Purpose Reloadable Prepaid Cards: Penetration, Use, Fees, and Fraud Risks, Fumiko Hayashi and Emily Cuddy, The Federal Reserve Bank of Kansas City (February 2014)
Gender: 51.0% female
General Purpose Reloadable Prepaid Cards: Penetration, Use, Fees, and Fraud Risks, Fumiko Hayashi and Emily Cuddy, The Federal Reserve Bank of Kansas City (February 2014)
In addition, the Bretton Woods study found similar demographic information among users of prepaid debit cards:
Source: Analysis of Branded General Purpose Reloadable Prepaid Cards, Bretton Woods, Inc. (February 2012)