Prepaid cards are the newest entrant in a 50-year continuum of network branded card products that have transformed the way people pay. As with traditional credit and debit cards, prepaid cards utilize the Visa®, MasterCard®, Discover® and American Express® networks as well as various EFT networks to automate payments.

The prepaid card industry emerged about a decade ago and is now in the early majority stage of product adoption. Prepaid cards represent the fastest growing segment of card-based payments and hold tremendous potential to continue to transform payments from inefficient, labor-intensive paper-based methods to electronic systems. The success of prepaid cards is attributable to value propositions such as convenience, cost savings and security for businesses, governments and consumers.

The prepaid card category has many strengths. It consists of a broad product set--ranging from nonreloadable gift cards to health care cards to general purpose reloadable cards. Prepaid cards have utility across a wide range of vertical applications--from incentives to payroll to government disbursements. And, they are commercialized by a broad spectrum of organizations--from financial institutions to non-financial institutions such as incentive companies, payroll service providers, retailers and money transfer companies (referred to in this white paper collectively as “issuers and program managers”).