Prepaid card sales are on the rise, and digital or ‘virtual’ prepaid cards continue to trend.
The U.S. prepaid card market grew at a compound annual growth rate (CAGR) of 8.6% from 2017-2022, according to Researchandmarket.com’s report “United States Prepaid Card and Digital Wallet Business and Investment Opportunities Databook – Market Size and Forecast, Consumer Attitude & Behaviour, Retail Spend.” The report estimated that, from 2022 to 2026, the market would rise from $542.26 billion to $826.96 billion, a CAGR of 11.1%.
The report further noted that, as more customers adopt digital payments, digital wallet providers are launching virtual prepaid card solutions.
Mario Spina, CEO of The PRIDE Stores, with 15 stores in the Chicagoland area and one in Indiana, predicted prepaid card sales will be up at his stores this year, and he expects customer demand to be primarily in restaurant gift cards.
Indeed, Paytronix’s “Restaurant Gift Card Sales Report 2022” noted restaurant gift card sales grew 22% in 2021. Family dining card sales were up 106%, fine dining cards were up 57%, and QSR cards were up 7%. Third-party sales of restaurant gift cards climbed 24%.
“The PRIDE Stores offers its own PRIDE gift cards, which is a great way to build brand awareness and retain loyal customers, as well as gain new customers,” Spina said. “They can be redeemed at any PRIDE Store, The PRIDE Beer Wine and Spirits Liquor Store, affiliated restaurants such as Urban Counter and Taco Urbano, plus our 93 Octane Brewery.”
The company also features a branded 93 Octane Brewery gift card that it sells out of its tap room. Gift cards are available in $25 and $50 denominations.
“Prepaid cards are a very important part of the convenience store’s payments mix,” said Richard Crone, CEO of Crone Consulting. “Of all of the gift cards they might sell, the most important to promote is their own private-label prepaid card. And that should be aggressively promoted. It should be accessible through their own branded mobile app.”
“Of all the different tenders they might accept, it’s the lowest cost — lower than cash, especially if they are their own program manager,” Crone said.
Private-label prepaid cards have built-in loyalty. “It’s like their own cryptocurrency,” he said.
C-stores with a mobile app should consider selling their store-branded prepaid cards digitally, as well.
When you enable the loading of your private-label card into your chain’s mobile app, it triggers a repeat spend, which is not only an important source of ongoing revenue, but also a contact point with the customer, noted Heidi Liebenguth, managing partner at Crone Consulting.
“It brings value far beyond the physical card,” she said, “because in letting someone check their balance, upload more funds, there’s a recurring contact point that can be used for marketing, that can be used for all kinds of customer engagement, that wasn’t possible before.”