Financial Institution Prepaid Issuance Remains Limited

Navigator Edition: April 2012
By: Josh Gilbert and Emma Causey

Faced with declining debit revenue in the wake of the Durbin Amendment, issuer interest in prepaid has dramatically increased over the past year.  Despite heightened interest, the majority of large issuers still do not offer a consumer reloadable prepaid product.   Recent First Annapolis research among top 25 debit providers found that only seven issuers broadly offer a consumer reloadable product.  Fourteen issuers offer payroll cards, which are primarily sold through their Treasury management businesses.  Gift cards, despite their limited financial and strategic value, remain the most prominent prepaid product with eighteen issuers offering such cards directly to their consumer customer base.

We expect the number of bank-issued prepaid products to significantly increase over the next six months.  A number of leading debit issuers will begin offering reloadable cards as either a bank account replacement or add-on (companion card, youth/teen card).  The number of payroll card programs will also expand in response to employer demand and favorable card issuing economics.  We do, however, expect to see notable variations in product design and level of integration with the overall banking experience.  These differences will likely lead to varying degrees of consumer adoption and ultimately, issuer success.

Figure 1: Top 25 Debit Issuer Prepaid Product Suite


Source: First Annapolis Consulting research; issuer websites.

For more information, please contact Josh Gilbert, Principal specializing in Deposit Access,; Emma Causey, Senior Analyst specializing in Deposit Access,

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