Open-loop card use propels prepaid card adoption
By Kristen Lawrence
Over the next three years, the total number of dollars loaded onto prepaid cards is expected to increase to $672 billion, more than doubling the amount - $330.03 billion - loaded in 2009, according to a study by Mercator Advisory Group.
The study attributes much of this growth to the increasing use of open-loop cards, which are set to expand by 36.6 percent over the next three years, compared to closed-loop prepaid cards which will only grow by 5.4 percent.
"Having now performed six prepaid forecasts, Mercator Advisory Group has found that the diversity of the prepaid market allows it to grow at this blistering pace, as government agencies, corporations, and consumers all find new uses for these cards," said Tim Sloane, vice president of client services and director of Mercator Advisory Group's prepaid advisory service.
However, prepaid cards should be adopted with caution. Like their more traditional counterparts, prepaid cards carry with them a list of fees, including activation charges, withdrawal fees and fees for receiving a paper statement.
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