Prepaid Market Forecasts 2006-2009

The report delivers significant data that addresses the comparative growth rates of different segments and the forecasted future growth based on Mercator's exclusive insights and analysis of these segments.

The report and underlying analysis (available to our members in a spreadsheet format) also delivers a comparison of Open spending versus Closed spending for all relevant prepaid market segments - information critical to anyone planning a prepaid strategy since it identifies markets where Open Cards are gaining market share over Closed Solutions, where Closed Solutions remain dominant, and where the markets are expanding to embrace both solutions.

"While the recently released Third Annual Market Performance: Spend, Growth and Opportunity delivers current market performance data and delves into total market size for each of the 34 segments, the Prepaid Market Forecast report addresses market penetration over the coming four years. The insights available from this analysis (and underlying data) shed light on the changing mix of Open versus Closed solutions as well as the practical expectations emerging from the Prepaid hype. This report shows the categories for growth and enables the reader to see the full scope of prepaid product growth moving forward," comments Tim Sloane, Director for Mercator Advisory Group's Debit Advisory Service.

Highlighted findings from this report are:

• The total spend on all prepaid products, both open and closed, in 2005 was $165.02 Billion. This report indicates that the prepaid market will top $236 Billion by 2009 reflecting a Compound Annual Growth Rate (CAGR) of 9.37%
• The Closed Prepaid Market will reach $192.3 Billion by 2009 reflecting a CAGR of just over 6.25%
• The Open Prepaid Market will grow at a CAGR of more than 32% achieving a total spend in 2009 of more than $43.8 Billion -- less than 1/4 the size of the Closed Prepaid Market in the same timeframe.
• The fastest growing markets include all of the Gift Card markets, Employer and Consumer Incentives, Open Campus and State Unemployment solutions.

Mercator Advisory Group forecasts typically underestimate growth (conservative approach). This year selected Closed prepaid markets were found to be slightly over estimated. The methodology used in this report has been modified to address this issue. The market causes for the shift in growth rates is identified.