Prepaid Debit Card Market Statistics

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:

Top 10 U.S. Prepaid Card Issuers (2013)

RankCompanyPurchase Volume
(mil.)
Cards (000)Purchase
Transaction (mil.)
Average Amount
1The Bancorp Bank$30,385.6057,704717.5$42
2MetaBank$17,167.0030,940529.6$32
3Green Dot Corp.$13,387.004,489484.70$28
4Comerica Bank$13,173.0011,074423.8$31
5JPMorgan Chase$10,800.009,500234.9$46
6H&R Block$8,700.002,600100.2$87
7Bank of America$5,114.907,462168.5$30
8U.S. Bank$3,680.333,581146.2$25
9Citibank$3,079.520,387131.7$23
10Wells Fargo$2,900.88,829102.6$28

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.

Prepaid Debit Card Market

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:

    • The number of prepaid card payments (including both general-purpose and private-label) totaled 9.2 billion transactions in 2012, an increase of 3.3 billion from 2009.
    • Prepaid card payments increased at the fastest rate as compared to other forms of noncash payments from 2009 to 2012. While the compound annual growth rate of total noncash payments was 4.4 percent from 2009 to 2012, the annual growth rate was 15.8 percent for prepaid cards.
  • Prepaid cards had the lowest average transaction value compared to other noncash payment methods. In 2012, the average value of prepaid card payments was $24, a slight increase from $23 in 2009, but a decrease from $26 in 2003.
  • Prepaid cards represented seven percent of noncash payments in 2012, up from 5% in 2009, 4% in 2006, and 1% in 2003.
  • In 2012 there were 3.1 billion general-purpose prepaid card transactions. General-purpose prepaid card payments (excluding private label) were the fastest growing noncash payment type, increasing at an annual rate of 33.5 percent from 2009 to 2012.
  • In 2012 there were 21 million general-purpose prepaid cash back transactions with an average value of $36.

In addition, it’s estimated that retail purchases with prepaid debit cards in the U.S. in 2014 exceeded $200 billion. (Source: Forbes)

Prepaid Card Usage

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:

  • For those who never reload the card–111 days
  • For those who occasionally reload–489 days
  • For those with direct deposit from the government–1,474 days
  • For those with direct deposit from non-government sources–925 days

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:

  • Never Reloaded–17.7%
  • Occasional Reload–13.4%
  • Periodic Self-Funded–45.8%
  • Periodic Government Direct Deposit–6.5%
  • Periodic Non-Government Direct Deposit–18.6%

Transaction Types: Purchases are by far the most common use of prepaid debit cards. ATM transactions are a distant second:

  • Purchases–97.1%
  • ATM–50.1%
  • Bill Payment–0.8%
  • Person-to-Person–9.7%

Average monthly purchase activity:

  • Number of monthly transactions: 7
  • Value of monthly transactions: $303
  • Percentage (and value) of PIN transactions: 29%
  • Percentage (and value) of Signature transactions: 71%

Cash Withdrawals versus Purchase Transactions:

  • Cash withdrawals: 13%
  • Purchase transactions: 87%

Top 10 Merchant Categories in Transaction Volume:

  1. Gas stations–18.8%
  2. Fast food restaurants–14.8%
  3. Grocery stores–13.7%
  4. Restaurants–5.9%
  5. Discount stores–3.7%
  6. Telecommunications–3.4%
  7. Drug stores–3.0%
  8. Miscellaneous food stores–2.3%
  9. Clothing stores–2.0%
  10. Video/DVD rental stores–1.8%

Consumer Attitudes Toward Prepaid Cards

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..

Customer Satisfaction

  • 44%–Very: It’s as helpful as I thought it would be
  • 29%–Extremely: It’s even more helpful that I thought it would be
  • 22%–Somewhat: It’s helpful, but not as much as I’d expected
  • 6%–Not: It’s not particularly helpful

What Prepaid Users Liked Most

  • 73%–Can’t overspend/overdraft
  • 41%–Easier and safer than carrying cash
  • 38%–Easier to pay my bills
  • 34%–Can have direct deposit
  • 27%–Cheaper than using a check casher
  • 26%–Like having card with a Discover/Visa/MC/Amex logo
  • 27%–Saves me time
  • 24%–Cheaper than a bank account
  • 23%–Easier to manage my money than what I did before
  • 6%–Other

Source: Analysis of Branded General Purpose Reloadable Prepaid Cards, Bretton Woods, Inc. (February 2012).

Prepaid Card Fees

Average Fees Based On Card Acquisition Source

–Average Monthly Value of Fees for Cards Obtained Via the Web

  • Maintenance and Origination Fees–$4.22
  • ATM Withdrawal Fees–$2.16
  • Transaction and Other Fees–$1.77

–Average Monthly Value of Fees for Cards Obtained at a Retailer

  • Maintenance and Origination Fees–$2.10
  • ATM Withdrawal Fees–$1.24
  • Transaction and Other Fees–$4.03

–Average Monthly Value of Fees for Cards Obtained at a Financial Institution

  • Maintenance and Origination Fees–$1.77
  • ATM Withdrawal Fees–$0.48
  • Transaction and Other Fees–$0.35

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 Fees

–Average monthly cardholder fees: $11.00

–Average fee composition:

  • Signature transactions: 41.8%
  • PIN transactions: 14.8%
  • IVR balance inquiry: 12.9%
  • ATM withdrawal: 12.7%
  • Account maintenance: 6.9%
  • Monthly fee: 4.1%
  • ATM balance inquiry: 3.1%
  • Decline fee: 2.5%
  • Other: 1.1%

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)

Demographics

Gender: 51.0% female

Race:

  • White: 75.6%
  • Black: 13.6%
  • Hispanic: 12.9%
  • American Indian: 0.7%
  • Asian: 3.7%
  • Multiple race: 2.3%
  • Hawaiian: 0.1%
  • Other: 3.9%

Age:

  • Under 15: 19.8%
  • 15 to 24: 14.1%
  • 25 to 34: 13.1%
  • 34 to 44: 13.5%
  • 45 to 54: 14.6%
  • 55 to 64: 11.7%
  • 65 and over: 13.2%

Marital Status:

  • Married: 50.1%
  • Widowed: 6.2%
  • Divorced: 10.6%
  • Separated: 2.2%
  • Single: 30.9%

Education:

  • Less than 9th grade: 5.7%
  • Less than 12th grade: 8.5%
  • High school: 29.8%
  • Some college: 20.7%
  • Associate’s Degree: 7.6%
  • Bachelor’s degree: 17.4%
  • Graduate degree: 10.3%

Income:

  • Less than $10k: 7.3%
  • $10,000-$15,000: 5.4%
  • $15,000-$25,000: 10.7%
  • $25,000-$35,000: 10.5%
  • $35,000-$50,000: 14.0%
  • $50,000-$75,000: 18.5%
  • $75,000-$100,000: 12.4%
  • $100,000-$150,000: 12.5%
  • $150,000-$200,000: 4.5%
  • More than $200,000: 4.2%

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:

  • 43% are Gen Y’ers
  • ? earn more than $45,000
  • 34% have a college degree or higher
  • There is high consumer satisfaction

Source: Analysis of Branded General Purpose Reloadable Prepaid Cards, Bretton Woods, Inc. (February 2012)

Prepaid Debit Card Resources

  1. 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)
  2. 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)
  3. Analysis of Branded General Purpose Reloadable Prepaid Cards, Bretton Woods, Inc. (February 2012)
  4. The Nilson Report (June 2014)
  5. The 2013 Federal Reserve Payments Study (December 2013)
  6. Why Americans Use Prepaid Cards (February 2014)
  7. Loaded with Uncertainty (September 2012)