UK Prepaid Cards Market: A Four-Page Quick Summary

Overview:
Consumers seek greater protection from online fraud and switch to new ways to access
UK Prepaid Card Market
Size services or goods. Over the years UK has seen tremendous growth in the number of
prepaid card products available to consumers, from 50 in 2007 to over 240 by 2015. The
16.36 Billion growth in availability of prepaid products is driving greater regular use of prepaid cards to

(In 2015) pay for goods and services.

The payment cards can be used very much in the same way as normal credit or debit
cards, but are preferred by a growing number of consumers because they carry a pre-
loaded, set amount of money rather than accessing money directly from a persons bank
account or paying credit card bills. 35% of the UK consumers use prepaid card to pay for
goods and services on daily basis.
Prepaid cards usage is highest for online shopping. Across Europe 6% of all prepaid
cards are specifically used for online purchases to avoid risk of bank or credit card details
being stolen and used by fraudsters. Prepaid cards on the other hand are also beneficial
for those who do not have a bank account. 2% of the prepaid cards in UK are used as
alternative to bank accounts.

Prepaid Cards Categorisation:

Open Loop Mixed Closed Loop

Cash Access Business Expenses Gift Cards

Corporate Payroll Transportation
Government Prepaid Mobile

Prepaid Card Industry Market

Comparative Market Analysis:
Share by Geographies
In 2015, global prepaid card market totalled 372 Billion, with US being the largest player
accounting for almost 40% of the global prepaid card market. Compared to US, UK
prepaid card market is still at its early stage with global market share of approximately
40%
56% 4.5%. The UK prepaid card industry is growing rapidly at a growth rate of 24% year on
5% year, which is ahead of growth rates of global and US prepaid card industry. The US
prepaid card industry is approaching its maturity stage growing at a slower rate at 16%
US UK ROW than UK.
The UK prepaid card market is expected to reach 38 Billion by 2019, considering the
faster adoption of prepaid cards by consumers.

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 Market Size:
UK Prepaid Card Market Size
Credit and Debit Cards are popular in UK for payments; together it comprises 63% of all
Forecast (Values in Billions)
payments. The rise in prepaid cards has gone hand-in-hand with the decline in credit card
38
usage in UK. 13% decline in transactions using credit cards is recorded in UK, in 2015.
31
The UK prepaid card market accounted for 16.36 Billion in 2015 and is growing at
25
CAGR of approximately 24%. The prepaid cards penetration in UK is at a nascent stage
20
16
and project tremendous growth potential in near future. In 2015, the prepaid card
transactions accounted for 1% of total ecommerce payment transactions in UK.
The UK Post Office is one of the countrys biggest drivers of prepaid growth, with more
than 4 Million cardholders across its product line, which includes prepaid gift, travel and
2015 2016 2017 2018 2019 GPR cards.
Source: BCG & LTP Analysis

UK Prepaid Segment Trends:

2015 UK Prepaid Market

The commercial prepaid segment is projected to grow at a 26% CAGR in the period
Segments 2015-2019. This is around four base points higher than the other categories because the
number of businesses adopting prepaid solutions is significantly increasing. The prepaid
solution, in fact, offers enhanced spending control features that allow better tracking and
27% reporting capabilities.
36%

Corporate Payroll 8
2% 3
2% 5% 11
Other Commercial
3% 7% 18% 4
Open Loop Government Welfare 13
6
Open Loop Government Welfare 2
Consumer Travel
Corporate Payroll 0.8
Healthcare Accounts 3
Healthcare Accounts
Consumer Travel 1.2
Gift Gift 1.0
Consumer Incentive 0.4
Online Online 0.8
0.4
Other Commercial
Consumer Incentive 0.7
0.3

2019 2015

UK Prepaid Card Segment Trends (Values in Billions)

251
UK Prepaid Spending per Capita:

UK prepaid spending per capita is $251 USD which is around 3.4 times higher than the
world average prepaid spending. The projected non-commercial prepaid spending per
72
capita will mainly increase because of the increasing adoption of prepaid cards for online
purchases and travel spending.
UK World
(Values in US $)

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 UK Gift Cards Market:

The increasing launch of digital particularly in B2B programmes is the major driver for
growth of gift cards market in UK. New players continue to enter the market from diverse
sectors, particularly leisure related companies.

In 2015, the UK gift card industry recorded an increase in annual sales of approximately
5% and the market is valued at 5.67 Billion.

Market Players:

Following are some of the key players in UK prepaid card industry players that offer
prepaid cards under, prepaid-consumer, prepaid-business and gift cards categories.

Spree Card: Spree Card is UKs largest distributor of prepaid cards in the
corporate environment with more than 84% of the agency card market share

Caxton FX: Caxton FX has an annual global turnover of $1.14Billion and is one
of the market leaders in the UK prepaid market. Its value proposition consists of
simple card usage policy (free issuance, transactions and ATM withdrawals), with
no load charges. It is accepted in 35 Million outlets worldwide, with all major
currencies available, the Caxton FX card is versatile enough to support the vast
majority of European holidaymakers.

Centtrip: Centtrip offers 14 currencies on a single card at spread-free

exchange rates. It is accepted at over 34 Million locations and 2.1 Million ATMs
worldwide.

Cashplus: Cashplus provides prepaid cards for consumers as well as

businesses. The company has issues about 1.3 Million Cashplus cards and have
processed over 3 Billion in payments

meCardz7: meCard is a prepaid card for teenagers. It is the user friendly,

flexible, prepaid service from MasterCard. It boasts an online linked-account
system. Companies like goHenry, Loot Bank, MoneyGram, Net+, Steam, Osper
provide prepaid cards and prepaid card solutions in growing UK prepaid card
industry.

Technology Trends:

Improving technologies and launch of innovative card designs based on season

or occasion drive the appeal of prepaid cards.

Introduction of chip technology into prepaid cards market enhance the security
for using prepaid cards.

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 Consumer Trends:

Increasing use of internet for online shopping & bill payments provide
opportunities for Prepaid Cards

Efficiency benefits of prepaid cards related to risk management, flexibility and

safety is leading to increased adoption of prepaid cards by consumers

Prepaid cards will increasingly turn into cash and check replacements for mass
market categories (meal vouchers, light banking products).

With the increase of e-commerce and democratization of travel, there will be

increasing attention and security for online payments and money management
for travel expenses.

Business Trends:

Increased retailer acceptance of card based payments benefit growth of prepaid

cards market.

The adoption of prepaid card solutions will increase among medium and large
corporations to increase transparency and spend tracking.

Corporate payroll will account for 20% of the prepaid market total UK prepaid
market in 2017. It will grow at a 26% CAGR which is 4% higher than other
segments; its growth will be driven by cost-effective solutions that prepaid cards
bring to corporations.

Retailers are promoting gift cards for increased sales.

Regulations:

The government will push towards the use of electronic payments as a way to
combat grey economies and increase transparency.

The government has proposed amendments to the fourth money laundering

directive (MLD4) to assess the problems with the existing framework.

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