BOSTON — The prepaid debit and payroll card industry is emerging as a formidable force in U.S. consumer financial services, according to a report from Aite Group.
The consultancy said the launch of an ambitious payroll card program by Wal-Mart in 2009, the successful IPO of Green Dot in 2010, and NetSpend's subsequent filing for an IPO have been historic milestones for the industry, the stydy pointed out.
Dollar volumes for the combined products reached $44 billion in 2009, a number Aite Group expects to rise to $164 billion for 2014. Multiple factors over the past few years-including the housing market bust, financial crisis, economic downturn, surge in unemployment, and large numbers of consumers defaulting on their debt-have contributed to the elimination of mainstream financial institutions in the low end of the market.
Aite said the prepaid debit and payroll card industry is uniquely positioned to fill this void because prepaid debit and payroll cards represent a compelling alternative to consumers shut out of checking accounts and credit cards.
