Home > Features > Prepaid Cards Seeing Steady Growth • Bookmark   • Newsletters   • Register Search Options

FEATURE

Prepaid Cards Seeing Steady Growth

Prepaid Cards Seeing Steady Growth

December 31, 2013
Text size: 
View in Digital Mag
Get XBIZ News
XBIZ Research
Will virtual reality boost the paysite market?
Yes, it will soon
  39.66%
Yes, but in a few years
  36.87%
No
  23.46%
Out of 179 votes. Results based on votes submitted by members of XBIZ.net social network.

" At the moment, the U.S. is the biggest consumer of prepaid cards, while not all prepaid cards allow billing for adult or gambling products, the popularity of the prepaid cards is steadily increasing. -Judy Shalom, managing director for Affil4You "

Millions of adult-oriented online transactions are occurring all over the world with alternative billing methods, and one sector of alternative billing that continues to grow as 2013 winds down is prepaid or preloaded cards. Not all prepaid cards can be used for adult entertainment, and in many European countries, they still take a back seat to debiting. Nonetheless, prepaid cards are on the rise in many places — especially the U.S.

“At the moment, the U.S. is the biggest consumer of prepaid cards,” explained Judy Shalom, managing director for Affil4You. “While not all prepaid cards allow billing for adult or gambling products, the popularity of the prepaid cards is steadily increasing — also outside of the U.S. in markets such as Europe, Latin America and Russia.”

Shalom added: “The market for prepaid cards is, along with m- and e-payments, one of the fastest growing non-cash payment markets out there. Most of the growth for this market is coming from the U.S., and most of the growth will come from the U.S. — as the bulk of it is already concentrated there and the prepaid card form of payment has been more successful there than in any other major market. The popularity of prepaid cards among consumers without bank accounts, combined with the extra budgetary control that prepaid cards give over debit cards, will continue to grow the popularity of the prepaid card compared to that of the debit card. Since 2009, the transaction volume for prepaid cards have grown by more than 20 percent, and are expected to reach 17 billion in 2014.”

When alternative billing experts are asked to discuss the advantages of prepaid cards, one word that still comes up a lot is “security.”

Clark Chambers, a business development specialist at the alternative billing-oriented 2000Charge, noted: “Primarily, users of prepaid cards look to this payment method to preserve some anonymity. A distinct advantage for the user is that they provide a safety measure against unscrupulous billing and also, overspending. There has always been a strong utilization of such cards among travelers—especially in Europe, where crossing borders might mean exchange fees, credit card fees, etc. Prepaids allow one to mitigate some of the unpleasantries credit cards offer.”

Chambers added: “Prior to the recession, I think most in the U.S. viewed prepaid cards as a tool for people with poor credit or less income. While that may be true to some extent, the current growth in this market shows that consumers are finding advantages in them as a financial management tool as well as security measure.”

Shalom said that while the popularity of prepaid cards will continue to increase, there is one disadvantage that users of prepaid cards still face: fees. “A common misconception among consumers is that prepaid cards are less expensive than debit cards,” said Shalom, who noted that prepaid cards can become expensive thanks to “all the basic fees for reloading, ATM withdrawals, monthly charges, opening or canceling an account. Combining all these costs, the average prepaid card can cost up to $300 per year in fees alone.”

Chambers pointed out that in some countries, cards in general are lagging behind as a payment method. But such countries, he stressed, also have major growth potential for prepaid cards. “The LATAM and BRIC countries would be categorized as lagging in the uptake of any plastic-based payment methods,” Chambers observed. “For example, U.S. businesses are clamoring to get into Brazil, the world’s seventh largest economy with 191 million people. One dominant billing method is a boleto, which translates to ticket or voucher. We’ve had great success by introducing our Pagos Bancarios payment option, which is a boleto option. This method requires the consumer to visit a bank or some markets, pay in cash in return for a boleto — which they remit online to the merchant, who is paid by the banks. We also provide access to a popular payment method in Russia called Qiwi. This is an e-wallet, with access online and from a large network of kiosks.”

Chambers continued: “The huge populations in these emerging markets is exactly why they are prime targets for alternative payments like prepaid cards. The market opportunity is enormous and is not being overlooked by the payments industry.”


OPINIONS & VIEWS

‘Anything Interactive’ Will Be in Industry’s Future

With the new year upon us, many people focus on resolutions and 92 percent of those who make them don’t succeed in keeping them. Others look towards the future. Looking back to the early years of... More »

Focusing, Again, on Tradeshow Etiquette

I’m very excited to have been asked by XBIZ World to write the third part of my ongoing series of articles on tradeshow etiquette. In Part I of the series, I discussed business cards, substance... More »

Retail Sales Get Boost From Staff Morale Building

My job is, and always has been, to do what is asked of me to the best of my ability. I’ve worn many hats in this company, as it’s not only adult retail but adult nightlife as well. I’ve... More »
XBIZ NEWSLETTERS
Stay informed of the latest industry developments. Get XBIZ newsletters delivered to your inbox. Subscribe today!
Enter email address:

* To manage existing subscriptions click here.






POPULAR PRODUCTS & SERVICES
Submit your press release to
multiple news outlets with 1 click.
Subscribe to RSS news feeds or
add free content to your website.
Access XBIZ news and articles
with your mobile device.
Subscribe to XBIZ Premiere magazine, the industry's leading adult retail trade publications, delivering the most timely and comprehensive business news and information to producers and retailers of adult products.

UPCOMING EVENTS

Everything To Do With Sex Show

Jan 20 - Jan 22
Montreal, Quebec

Everything To Do With Sex Show

Jan 27 - Jan 29
Halifax, Nova Scotia

The European Summit

Mar 04 - Mar 07
Barcelona-Sitges, Spain

The TEA Show

Mar 05 - Mar 06
Hollywood, CA
Everyday thousands of business professionals browse XBIZ's industry directory for quality products and services. Not listed yet? Your company could be losing potential new business. Submit your company today!
Use XBIZ RSS feeds to stay informed of the latest industry developments or as a content syndication tool for your website!