For card processors, if merchant and issuing processing were yesterday’s growth engine in the United States, closed-loop and cash-based money transfers are today’s growth engine, then open-loop prepaid cards are the growth engine of tomorrow. By 2009, prepaid processing will be as large an industry as the debit card and ATM processing industry was in 2004.

By 2013, the global payments industry will be worth USD 703 billion, up from USD 467 billion in 2003, according to a new Boston Consulting Group report, “Navigating to Win: Global Payments 2006”. Average revenues per transaction will also fall to USD 1.58 for domestic payments and to USD 7.27 for cross border payments by 2013, down from the respective totals of USD 2.08 and USD 9.33 in 2003. For that reason, banks wanting to preserve their payments businesses must address global and regional dynamics that threaten their revenues and increase operating costs.

Banks in the US meanwhile have to review core business models to maximize a saturated credit card market, accommodate the growth of debit payment and eliminate paper from B2B payments. Transactional data flows simultaneously have to be analyzed to better meet customer needs and allow banks to leverage new market dynamics. In the Asia-Pacific, China and India hold greatest market potential for multinational banks, with China predicted to have payments revenue growth of almost 13 per cent per year to 2013, but banks need to identify specific market needs to profit.