United States Prepaid Card and Digital Wallet Business Report 2024: Market to Reach $903.93 Billion by 2028 from $542.26 Billion in 2023 – Federal Reserve’s Propose to Slash Swipe Fees by Nearly a 1/3
Dublin, May 30, 2024 (GLOBE NEWSWIRE) — The “United States Prepaid Card and Digital Wallet Business and Investment Opportunities Databook – Market Size and Forecast, Consumer Attitude & Behaviour, Retail Spend – Q1 2024 Update” report has been added to ResearchAndMarkets.com’s offering.
Prepaid card market (value terms) in United States increased at a CAGR of 7.7% during 2019-2023. Over the forecast period of 2024 to 2028, the market is expected to record a CAGR of 10.5%, increasing from US$542.26 billion in 2023 to reach US$903.93 billion by 2028.
The use of prepaid payment instruments continues to rise in the United States. This is projected to continue over the medium term, thereby aiding the prepaid card market growth in 2024. The adoption of digital wallets is much higher among young generation shoppers when compared to older ones. While convenience is a factor, consumers are also interested in using digital wallets as they allow storing documents.
The trend of new prepaid card launches is expected to gain momentum in the United States in 2024. This will aid innovation and competitive landscape over the medium term in the sector. The growing presence of tech giants in the payments market is catching the eye of regulators. Consequently, the publisher expects regulatory activities to gain momentum in 2024. Overall, the publisher maintains a positive growth outlook for the US prepaid card market over the next three to four years.
Consumer spending through digital wallets and prepaid cards continues to grow in the United States
The adoption of prepaid payment instruments continues to remain strong in the United States market. The preference between digital wallets and debit cards is, however, different among different age groups. According to a report from PYMNTS and AWS, 79% of Gen Z consumers make use of digital wallets compared to just 26% of baby boomers and seniors. The report further revealed that 19% of Gen Z consumers use digital wallets for grocery purchases, compared to 1.7% of baby boomers and seniors.
The report also revealed that most people still use debit cards as the main way to make payments through digital wallets when shopping in person for retail and groceries. In November 2023, over half of the digital wallet transactions in physical stores and supermarkets were done using debit cards. While convenience is driving digital wallet usage, other factors including the ability to store documents also aided the adoption of prepaid payment instruments. Young generation consumers, 78% of Gen Z, and 75% of millennials are using digital wallets as they can store event tickets and driver’s licenses.
Consumer Financial Protection Bureau (CFPB) proposes regulatory oversight on big tech firms offering digital wallets
The main regulator for consumer finance in the United States is looking to gain additional authority to regulate technology firms providing digital wallets and payment apps. This move aims to increase the level of scrutiny on companies like Google and Apple in the financial technology sector.
The Consumer Financial Protection Bureau, in November 2023, proposed to bring non-bank companies offering digital payment services under a regulatory framework. The goal is to ensure that the rapidly growing sector, widely used by millions for fund transfers and retail transactions, follows US consumer protection laws.
According to a CFPB, the proposed rule would subject the largest players in the industry, those facilitating more than 5 million consumer transactions annually, to regular supervision by the agency. This is likely to impact nearly 17 companies, which send over 13 billion payments every year, as per CFPB.
The regulatory oversight would apply to peer-to-peer platforms like Venmo and Cash App, along with cryptocurrency wallets, and others. The goal is to offer more protection to consumers using digital wallets. The proposal to regulate digital wallets is a clear indication that more and more consumers are linking their bank accounts to digital wallets offered by firms like Apple and Google.
The Federal Reserve’s proposes to slash the swipe fees by nearly a third in the United States
The cost of processing debit card transactions has declined significantly over the years. In line with this, the Federal Reserve has proposed to cut down the swipe fees by nearly a third in the United States. The Federal Reserve, in October 2023, proposed a cut from the current 21 cents per transaction to 14.4 cents per transaction.
The proposal, now open for public input, signifies the Federal Reserve’s first attempt to modify the fee cap established in 2,011. As per Federal Reserve data, these fees amounted to US$31.59 billion for lenders in 2021. The cut down in swipe fees is, therefore, going to have a significant impact on banking institutions. Retailers, on the other hand, have welcomed the proposal in the United States.
The publisher expects the proposed regulation to further accelerate the shift from high-interest-rate credit cards to debit cards over the medium term. This will subsequently support the growth of the United States prepaid card market over the next three to four years in the United States.
Scope
United States Prepaid Payment Instrument Market Size and Forecast
- Transaction Value Trend Analysis
- Transaction Volume Trend Analysis
- Average Value per Transaction
United States Digital Wallet Market Size and Forecast
- Transaction Value Trend Analysis
- Transaction Volume Trend Analysis
- Average Value per Transaction
United States Digital Wallet Market Size and Forecast by Key Segments
- Retail Shopping (Value, Volume, Avg. Value)
- Travel (Value, Volume, Avg. Value)
- Entertainment and Gaming (Value, Volume, Avg. Value)
- Restaurant (Value, Volume, Avg. Value)
- Recharge and Bill Payment (Value, Volume, Avg. Value)
United States Digital Wallet Spend by Key Retail Categories
- Food and Grocery
- Health and Beauty Products
- Apparel and Foot Wear
- Books, Music and Video
- Consumer Electronics
- Pharmacy and Wellness
- Gas Stations
- Restaurants and Bars
- Toys, Kids and Baby Products
- Services
- Other Categories
United States Prepaid Card Industry Market Attractiveness
- Load Value Trend Analysis
- Transaction Value Trend Analysis
- Transaction Volume Trend Analysis
- Average Value per Transaction
- Number of Cards
Market Share Analysis by Functional Attributes – Open Loop vs. Closed Loop
United States Open Loop Prepaid Card Future Growth Dynamics
- Transaction Value Trend Analysis
- Transaction Volume Trend Analysis
- Average Value per Transaction
- Number of Cards
United States Closed Loop Prepaid Card Future Growth Dynamics
- Transaction Value Trend Analysis
- Transaction Volume Trend Analysis
- Average Value per Transaction
- Number of Cards
United States Prepaid Card Market Share by Key Players
- General Purpose Prepaid Cards
- Business and Administrative Expense Prepaid Cards
- Travel Forex Prepaid Cards
- Meal Prepaid Cards
United States Prepaid Card Consumer Usage Trends
- By Age Group
- By Income Group
- By Gender
United States Prepaid Card Spend by Key Retail Categories
- Food and Grocery
- Health and Beauty Products
- Apparel and Foot Wear
- Books, Music and Video
- Consumer Electronics
- Pharmacy and Wellness
- Gas Stations
- Restaurants and Bars
- Toys, Kids and Baby Products
- Services
- Other Categories
United States General Purpose Prepaid Card Market Size and Forecast
United States Gift Card Market Size and Forecast
Gift Card Market Size and Forecast by Functional Attribute
- By Open Loop Gift Card
- By Closed Loop Gift Card
Gift Card Market Size and Forecast by Consumer Segments
- By Retail Consumer Segment
- By Corporate Consumer Segment
Gift Card Market Share Analysis by Retail Categories
Gift Card Market Share Analysis by Gifting Occasion
Gift Card Market Share Analysis by Purchase Location
United States Entertainment and Gaming Prepaid Card Market Size and Forecast
United States Teen and Campus Prepaid Card Market Size and Forecast
Teen and Campus Prepaid Card Market Size and Forecast by Functional Attribute
- By Open Loop Teen and Campus Prepaid Card
- By Closed Loop Teen and Campus Prepaid Card
United States Business and Administrative Expense Prepaid Card Market Size and Forecast
Business and Administrative Expense Prepaid Card Market Size and Forecast by Consumer Segments
- By Small Scale Business Segment
- By Mid-Tier Business Segment
- By Enterprise Business Segment
- By Government Segment
United States Payroll Prepaid Card Market Size and Forecast
Payroll Prepaid Card Market Size and Forecast by Consumer Segments
- By Small Scale Business Segment
- By Mid-Tier Business Segment
- By Enterprise Business Segment
- By Government Segment
United States Meal Prepaid Card Market Size and Forecast
Meal Prepaid Card Market Size and Forecast by Consumer Segments
- By Small Scale Business Segment
- By Mid-Tier Business Segment
- By Enterprise Business Segment
- By Government Segment
United States Travel Forex Prepaid Card Market Size and Forecast
Travel Forex Prepaid Card Market Size and Forecast by Consumer Segments
- By Retail
- By Small Scale Business Segment
- By Mid-Tier Business Segment
- By Enterprise Business Segment
- By Government Segment
United States Transit and Tolls Prepaid Card Market Size and Forecast
United States Healthcare and Wellness Prepaid Card Market Size and Forecast
United States Social Security and Other Government Benefit Programs Prepaid Card Market Size and Forecast
United States Fuel Prepaid Cards Market Size and Forecast
United States Utilities, and Other Prepaid Cards Market Size and Forecast
United States Virtual Prepaid Card Industry Market Attractiveness
- Transaction Value Trend Analysis
- Transaction Volume Trend Analysis
- Average Value per Transaction
United States Virtual Prepaid Card Market Size and Future Growth Dynamics by Key Categories
- General Purpose Prepaid Cards
- Gift Cards
- Entertainment and Gaming Prepaid Cards
- Teen and Campus Prepaid Cards
- Business and Administrative Expense Prepaid Cards
- Payroll Prepaid Cards
- Meal Prepaid Cards
- Travel Forex Prepaid Cards
- Transit and Trolls Prepaid Cards
- Social Security and Other Government Benefit Programs Prepaid Cards
- Fuel Prepaid Cards
- Utilities and Other Prepaid Cards
For more information about this report visit https://www.researchandmarkets.com/r/o1fyx0
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