The BCG research shows that Europe’s predicted total spending figure amounts to $163 billion, 25.4 percent of the estimated global total of $645 billion, leaving it behind the US ($296 billion and 45.9 percent of the global total), but well ahead of Japan ($59 billion and 9.1 percent of the global total).
Analysing the European landscape on a market-by-market basis, BCG’s study notes that the UK’s predicted total prepaid spend of $34 billion by 2010 (5.3 percent of the global total) positions it as Europe’s largest single market and the fourth largest in the world.
The UK is closely followed by Italy, where total spending is estimated to hit $33 billion (5.1 percent of the global total and the fifth largest in the world), and France, with an estimated total spend of $27 billion (4.2 percent of the global total and the seventh largest in the world).
Eastern Europe impact
It is in Eastern Europe where prepaid spending is set to make the biggest impact as a proportion of total payment card spend. In Poland, total prepaid spend is estimated to reach $11 billion, equivalent to 14.1 percent of spend using payments in the country as a whole.
The BCG research also shows that in Russia, the anticipated total prepaid spend of $23 billion represents a 12.6 percent share of the domestic market. According to the research, both markets rank well ahead of their Western European neighbours, including Germany, where domestic market penetration is estimated to reach 7.7 percent ($26 billion).
The research shows that one of the main drivers of prepaid spending in the future will be through government programmes for the payment of benefits. In Russia, 23.2 percent of total government benefit spending is expected to be routed through prepaid cards by 2010, accounting for $13 billion in that market alone. Similarly, in Italy, prepaid share of total government spend is predicted to reach 28 percent ($14 billion).
According to BCG, the second biggest category of prepaid spend is gifting, with France and Germany leading the way in Europe. In Germany prepaid is expected to account for 15.7 percent of overall gift card spending ($16 billion), while in France the prepaid spend in this area will go even further and reach 19.8 percent of category spend ($17 billion).
Additional findings of the study are that corporate prepaid spending is expected to reach at least $14 billion by 2010 in Europe. According to MasterCard, this is a category that has readily gained traction around the world and has significant upside potential as companies have started to use prepaid cards to monitor staff expenditure more rigorously than previously possible when using cash. Also, prepaid spend in the consumer travel category is predicted to reach $1 billion in France, Germany and the UK by 2010.