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$822B
EXECUTIVE SUMMARY
THE POTENTIAL FOR PREPAID REMAINS STRONG
The prepaid opportunity continues to grow around the world and is expected to reach
US$822 billion by 2017. The popularity of prepaid is driven by its unique and practical
ability to solve for almost any payment need. It democratizes electronic payments for
those outside the traditional banking system and provides a transparent, cost-effective
alternative to cash and checks for both governments and businesses. Prepaid also serves
the needs of banked consumers who find it an ideal payment tool for segmenting spend
such as travel and online shopping.
ADVANCING INSIGHTS
ADVANCING COMMERCE
JULY, 2012
Methodology
The 2012 Global Prepaid Sizing Study, looking at 35 countries and 20
verticals, was developed utilizing a robust and tested methodology. The
study begins by defining 20 distinct and mutually exclusive verticals, which
together capture the full set of Gross Dollar Volume (GDV) spend in each
geographic market reviewed. The next phase is to determine a vertical size,
calculating the total payment flows through each vertical (e.g., corporate
payroll is all money flows to working individuals in a certain country) through
rigorous sets of foundational data from central banks, government censuses
and economic databases. Then, determination is made for the maximum
penetration or product ceiling that prepaid could reach within the vertical
(e.g., total unbanked and underbanked populations in a certain country).
Talking with a wide range of experts in the field, leveraging secondary
research and utilizing internal data, the study then identifies the current
vertical GDV for the baseline year. The study's proprietary model projects out
the GDV for each year between the baseline and 2017 based on the expected
growth curve. After the model projections are completed, a series of data
sense checks are performed including detailed bottoms up program level
build ups per vertical and country, extensive data triangulation and feedback
loops with a wide range of prepaid experts before the study is completed.
Note: All charts and graph information supplied, unless otherwise indicated,
are by Boston Consulting Group, January 2012.
ADVANCING INSIGHTS
ADVANCING COMMERCE
$177
CAGR
2010
2017
27%
Europe
$28 B
16%
US
$421 B
US
$152 B
Europe
$149 B
billion
26%
MEA
$46 B
37%
LAC
$15 B
$152
51%
%
MEA
$3 B
billion
Government
Benefits
38%
Canada
$19 B
billion
Corporate Payroll
Canada
$2 B
$191
AP
$10 B
General Purpose
Reloadable
AP
$54 B
LAC
$133 B
$56
billion
While the U.S. market continues to present the largest opportunity, the rest of the world is
accelerating at a rapid pace. In fact, by 2017 we expect to see a more balanced global share,
with the rest of the world representing almost half of the global open loop opportunity.
Consumer Travel
$55
billion
2010
2017
U.S. 421
Healthcare
Account
ROW 148
17%
USA
73%
ROW
27%
CAGR
ROW 32%
USA 16%
51%
KSA/UAE 13
Russia 16
Canada 19
32%
India 23
U.K/Ireland 31
Italy 41
Mexico 46
Brazil 65
Total: $210 B
Total: $822 B
In addition to the U.S., eight markets are expected to play a key role in driving the growth of
prepaid through 2017: Brazil, Mexico, Italy, U.K./Ireland, India, Canada, Russia and KSA/UAE.
ADVANCING INSIGHTS
ADVANCING COMMERCE
East Asia,
Southeast Asia
876 million adults
49%
59%
8%
South Asia
612 million adults
25.6%
U.S. households
(close to 30 million)
that are either
unbanked or
underbanked
Source: FDIC National
Survey of Unbanked
and Underbanked
Households, 2009
45%
The compounded
annual growth rate
(2010-2017) for
corporate payroll
prepaid cards in
UAE largely driven
by the UAE Ministry
of Labour Decree
that requires all
business institutions
registered with
the Ministry of
Labour to transfer
salaries of all
their employees
through the Wages
Protection System
(WPS)
58%
Latin America
250 million adults
Middle East
136 million adults
65%
67%
Sub-Saharan Africa
326 million adults
80%
Total
2,455 million adults
53%
McKinsey and Financial Access Initiative, Half the World is Unbanked, October 2009
ADVANCING INSIGHTS
ADVANCING COMMERCE
Consumer Travel
$55
Healthcare Accounts
$25
Online
$23
Consumer Incentive
The percent of
the total European
consumer prepaid
opportunity that
is projected to be
driven by online
shopping or
e-commerce
$395
billion
$31
Gift
16%
Prepaid remains a smart cash and check replacement for mass market categories
such as meal vouchers and transit as well as a complementary light banking product
for banked consumers, giving them a bank account in their pocket. This is especially
relevant for Europe where a large amount of the population is banked.
Further, an increased focus on budgeting and security for both travel and online
payments has elevated the relevance of prepaid among banked consumers who
want to segregate their spending for better control. For travelers seeking a safer
alternative to cash and a more convenient alternative to travelers checks, prepaid
satisfies the needs of both leisure and business travelers. Additionally, technology,
innovation and adoption especially in mobile are presenting unprecedented
opportunities for prepaid. Depending on the market, these opportunities can
further extend the attractiveness of prepaid to banked customers.
2017 ESTIMATED OPEN LOOP CONSUMER TRAVEL GDV BY MAJOR MARKET
15.4
U.K./Ireland
7.5
Germany
4.5
Brazil
4.2
Australia
France
Canada
Russia
2.9
2.7
2.1
1.8
ADVANCING INSIGHTS
ADVANCING COMMERCE
Other
Commercial
41%
As health
care costs rise,
increasing number
of employers
are adopting a
consumer-directed
approach to health
care, shifting
more of the costs
to the employee
in the form of
higher deductibles
and larger copayments. As a
result, employees
are relying on
tax-advantaged
programs such as
Health Savings
Accounts (HSAs),
Flexible Spending
Accounts (FSAs)
and Health
Reimbursement
Accounts (HRAs),
to defray these
additional out-ofpocket expenses
$52
billion
The projected
size of the U.S.
healthcare
market by 2017
Representing
7% of the total
Commercial
category
opportunity
$191 B
Corporate
Payroll
59%77%
Total: $325 B
ADVANCING INSIGHTS
ADVANCING COMMERCE
21%
The projected
2010-2017 CAGR
growth for the
global government
benefits opportunity.
The segment
is projected to
increase from $47
billion in 2010 to
$177 billion in 2017.
ROW 19
U.S. 120
11%
Russia 2
India 2
Italy 5
23%
Canada 8
U.K/Ireland 9
Mexico 16
66%
http://www.businessweek.com/magazine/italys-cap-on-cash-payments-12082011.html
ADVANCING INSIGHTS
ADVANCING COMMERCE
ADVANCING INSIGHTS
ADVANCING COMMERCE