prepaid conference held in Prague on 10-11 May, has released the
findings of a new study on the European prepaid market, conducted
by US research consultancy Boston Consulting Group (BCG). According
to the study, spending on prepaid payment cards in Europe is
estimated to reach $164 billion by 2010, with the UK being Europe’s
largest single market for prepaid card payments by volume.
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
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