Updated Prepaid Market Forecasts 2007 to 2010

The report finds that the total for load volume across all 33 Prepaid Market Segments, including all Open and Closed Solutions, will reach $421.5 billion by 2010. The Closed Loop market will represent $239.9 billion of that total while Network Branded solutions will represent more than half of the entire market at $181.6 billion.

This represents unprecedented growth for Network Branded solutions. In 2006 Network Branded solutions accounted for less than 14% of the total prepaid dollar volume, but the Network Branded market is growing at a Compound Annual Growth Rate (CAGR) of 53% which means that it is catching up fast since the Closed Loop market is growing at a leisurely CAGR of 8.1%.

Note, however, that these growth rates represent just the average of the total Network Branded and Closed Loop markets, and averages can be very deceiving. For example, several Network Branded market segments have exceeded 100% annual growth rates while one Closed Loop market segments exceeded 250% growth in 2006.

Tim Sloane, Director of the Debit Service for Mercator Advisory Group and the author of the report indicates that this forecast is conservative: "This research indicates that the Network Branded industry has the opportunity to actually increase its growth rate beyond the predicted 53% CAGR if Restricted Authorization Networks (RAN) and Merchant Funded Networks overcome key obstacles and gain traction in the prepaid industry. Closed Loop prepaid suppliers that fail to consider the impact of RAN solutions will suffer the most, especially if they derive significant revenue from either of the two Prepaid Incentives market segments where RAN will experience the most growth."