View Point

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Prepaid cards continue to enjoy high popularity in the UK with increasing utilization by retail customers for functions such as gifting, travel, transportation, and online shopping. Prepaid cards are also witnessing high growth in the country due to increasing corporate adoption. The UK Government is pushing for prepaid card use as well for benefit disbursements. Card issuers in the UK are focusing on designing prepaid products that meet the requirements of niche retail segments, such as international travellers, students, migrant workers, parents, to outperform competition and gain market share.

The growth potential of UK prepaid card market remains high. The market in terms of Gross Dollar Value (GDV) is expected to record a CAGR of 11.2% from 2016 to 2020, to reach USD 63.1 billion by 2020.

Card issuers are capitalizing on the inherent uncertainty of foreign exchange rates to offer innovative solution to consumers. Gift card market in the UK is expected to post strong growth over the forecast period. Open loop gift cards are posting higher growth rate vis-à-vis closed loop gift cards. Businesses are playing an important role in driving sales of gift cards with many companies using them for rewarding their staff or giving them bonus. In order to leverage on this trend, gift card issuers are now creating a corporate division that provides expert advice, advanced tools, and support to help businesses motivate, incentivize and reward employees and customers.

In an emerging trend, UK government agencies are increasingly adopting prepaid cards to disburse different benefits including pension, child benefit, and job seeker’s allowance. Use of prepaid governments benefits card is expected to increase in the future as in September 2014, Work and Pensions Secretary Iain Duncan Smith announced that UK government will introduce prepaid benefit cards in order to stop claimants from spending benefit money on alcohol, drugs or gambling.

Given the high penetration rate of smartphones and internet in the UK, PayNXT360 expects integrated solutions that combine prepaid cards with mobile application to be introduced to drive innovation.

Want to gain deeper understanding of prepaid card dynamics in the UK? 

Announcing the ‘Prepaid Cards Market Intelligence’ series – UK Prepaid Cards Business and Investment Opportunities – Market Size and Forecast (2011-2020), Targeting Strategies, Analysis of Business Trends, Consumer Attitude & Behaviour, Retail Spend, Market Risk, Competitive Landscape and Market Innovation.                    

This report from PayNXT360 provides a strategic analysis of prepaid (pay before) cards, offering a wealth of insights to help companies understand this growing but quickly changing market:

  • Market dynamics: Provides a comprehensive view on size and structure, industry dynamics, market trends, consumer attitude and behaviour, and competitive landscape in prepaid card industry.
  • Open loop and closed loop: Provides market estimates and forecasts to assess opportunities in open loop and closed loop prepaid market segments. Details four essential KPIs – number of cards in circulation, numbers transactions, load value, and value of transactions.
  • Prepaid card categories: Details market opportunities across 11 market segments in prepaid cards for the period 2011-2020 and identifies potential risks, and consumer adoption. Card categories include – Gift Cards, Teen and Campus Cards, General Purpose Reloadable Cards, Remittance Cards, Travel Cards, Business Expense Cards, Payroll Cards, Corporate Incentive Cards, Consumer Incentives, Government Benefit & Other Program Cards, Healthcare & Insurance Cards.
  • Benchmarking and risk index: Benchmarks the prepaid card industry in the country with key global markets along with a risk assessment through PayNXT360’s proprietary Prepaid Cards Industry Risk Index (PCIRI).
  • Consumer attitude and behaviour: Drawing from proprietary survey results, this report identifies and interprets key prepaid KPIs, including spend by age, gender, and income level. In addition, it provides an overview of how consumers are currently using prepaid cards across five key categories – travel, bill payment, retail spend, cash withdrawal, and P2P transfers. It also provides a breakdown by transaction size.
  • Retail spend: Breaks down retail spend across 11 categories to provide detailed insights on consumer behaviour and changing dynamics of prepaid card spend.
  • Gift cards: Drawing from proprietary survey results, this report provides in-depth analysis of opportunities in both open loop and closed loop prepaid gift card categories. Assesses consumer behaviour by type of consumer (retail and corporate), gifting occasion, card type (paper, plastic, digital), and market share by retail categories.
  • Innovation and market strategies: Explores prepaid card strategies, including innovations across categories, competitive positioning, and new product launches.

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