Thought Leadership
5 min read
Contents:
  • Prepaid Card Industry Overview
  • Gig Workers Prefer Prepaid Card Payments
  • Growing Prepaid Card Adoption Among Millennials and Gen Z
  • Virtual Prepaid Cards: A Boon for Security and Efficiency
  • eGift Cards Witness Robust Growth
  • Prepaid-as-a-Service White Label Solutions on the Rise
  • Final Thoughts

From traditional players to innovative tech disruptors, the prepaid landscape is becoming increasingly competitive, offering immense opportunities for growth.

Prepaid Card Industry Overview

The prepaid card industry is a dynamic and rapidly evolving market. In 2024, the U.S. prepaid card card market reached a value of $1.76 billion, with transactions worldwide expected to surpass $10.62 billion in 2034.1

prepaid market

Major players like Visa, Mastercard, American Express, Green Dot, and Netspend continue to dominate the prepaid card market, but tech-forward companies such as PayPal, Venmo, Square, and Apple are significantly reshaping the competitive landscape.

Innovations like payroll cards and reloadable prepaid cards are driving growth, particularly in industries like hospitality and construction, where they provide secure payment solutions for migrant and low-income workers.

The shift toward digital wallets is another key trend. Young generations, especially Gen Z and millennials, are adopting digital wallets at high rates, with 79% of Gen Z and 75% of millennials using them to store payment instruments, event tickets, and personal identification.2 The convenience and security offered by prepaid cards make them a vital part of this ecosystem.

An infographic shows the 2020-2021 Market Summary for virtual cards.

Gig Workers Prefer Prepaid Card Payments

The gig economy—currently valued at $556.7 billion in 2024 and projected to triple by 2032—is one of the key drivers of prepaid card adoption.3 With 59 million Americans engaged in gig work, timely payment is a top priority for independent workers.4

According to recent surveys, 84% of gig workers would take on more assignments if they were paid faster.5

Prepaid cards offer an ideal solution for companies to address this need, enabling real-time payments that bypass the delays of traditional payment systems. This flexibility attracts gig workers and fosters stronger relationships between freelancers and companies.

A chart shows that freelancers are not entirely happy with their payment experience, with 50.4% of respondents saying it “needs improvement.”

Growing Prepaid Card Adoption Among Millennials and Gen Z

Millennials and Gen Z—digital natives who value convenience and security—are driving the adoption of prepaid cards.

For millennials, prepaid cards provide a seamless way to shop online and withdraw cash without the risks associated with traditional checking accounts, such as overdraft fees and maintaining minimum balances.

Companies like Venmo and Square have responded by launching prepaid debit cards that integrate with their platforms, making transactions effortless and secure.

The preferences of these demographics also extend to virtual prepaid cards and digital wallets, which are gaining momentum as secure, flexible payment options. By addressing their needs for speed, security, and digital integration, the prepaid card market is poised for sustained growth.

A graph shows 15 reasons why millennials prefer prepaid card purchases.

Virtual Prepaid Cards: A Boon for Security and Efficiency

Virtual prepaid cards have seen a surge in adoption due to their enhanced security features for online transactions. With the ability to generate unique card numbers for each purchase, these cards minimize the risk of fraud and data breaches.

Juniper Research projects that virtual card transactions in the B2B sector will grow from $3 trillion in 2024 to $11 trillion by 2028, making them the fastest-growing payment method in this category.6

Businesses are leveraging virtual prepaid cards to streamline operations, improve transparency, and enhance security. The rapid growth of virtual cards highlights their potential to transform payment processes for both consumers and enterprises.

virtual card market

eGift Cards Witness Robust Growth

The popularity of digital gift cards has skyrocketed, driven by e-commerce and consumer demand for personalized gifting options. In North America, 52% of respondents anticipated increased gift card budgets in 2024.7

Innovative features like video uploads and live personalization, as seen with Home Depot’s eGift cards, are helping companies stand out in this competitive market.

Social media also plays a crucial role in promoting eGift cards. Platforms like TikTok and Instagram have become major hubs for product discovery, with 43% of users making purchases directly through social media.8

Influencer marketing and strategic partnerships offer significant opportunities for prepaid card providers to reach their target audiences effectively.

digital gift card market

Prepaid-as-a-Service White Label Solutions on the Rise

Prepaid-as-a-Service (PaaS) is reshaping the prepaid card industry by enabling companies to launch white-label prepaid card programs.

For instance, Apple’s Cash Card, powered by Green Dot, allows consumers to seamlessly collect and spend daily cashback.

PaaS providers offer robust backend systems, including administrative portals, secure encryption, and compliance with regulations like PCI DSS and PSD2. This approach not only reduces the barriers to entry but also enables businesses to provide custom-branded prepaid card solutions, opening up new revenue streams.

Final Thoughts

The prepaid card industry is evolving rapidly, driven by technological advancements, changing consumer preferences, and the growing gig economy. Whether it’s payroll cards, virtual cards, or eGift cards, prepaid solutions continue to meet the diverse needs of businesses and consumers alike.

If you’re curious about the trends shaping the prepaid card market or have ideas to share, we’d love to hear from you. Let’s explore how prepaid innovation can benefit your business and customers.