Prepaid Phone Cards

Invented for the convenience of their users, prepaid phone cards or calling cards are widely used today as an inexpensive alternative to “landlines,” or home telephone services.  Long distance phone service has been an incredibly competitive market, but not everyone wants to pay to have full-time long distance service in their home of business.  This is where the phone card serves.  One of the big advantages to prepaid calling card is that you only pay for the minutes used.

Prepaid calling cards are so popular that some companies even supply them to their employees as a company benefit, or to provide employees with calling cards to use while traveling for business.  Doing this provides benefits not only to employees, but the company as well, as spending can be tracked easily, and a record tracking the calls made by the phone card user is readily available. 

The ATLANTIC – ACM Study (2003) predicted that the prepaid calling card industry would reach $6.4 billion by 2008.  In a current study, iDPhoneCard.com expects the calling card industry to reach $10 billion in sales by the year 2010.

Gift Cards and Prepaid Debit Cards

A study by the Federal Reserve Bank of Philadelphia in March 2007 indicated that prepaid cards accounted for $181.7 billion in transactions in 2006, and is one of the fastest growing payment products.  Prepaid cards are among the newest payment card innovations.  They are distinguished by a pay early model.  The most well known and successful version of this product is retail gift cards.

Gift Card Processors

This category is obviously linked to the use of gift cards, prepaid debit cards, and other stored value instruments.  It represents the processing of commercial transactions where a prepaid debit card is used as a payment vehicle.

Bank Debit Cards

According to a 2007 study, Debt Issuers Survey (Dove Consulting), bank debit card volume increased by 18% in 2006 and a similar rise is expected in 2007.  The Nilson Report (2005) had debit cards ending the year with 19.7 billion transactions, 600 million more than the 19.1 billion credit card transactions.  Market share was 51% for debit cards and 49% for credit cards (based on volume) according to the report.

The Nilson Report also reported that that the average transaction using a debit card was $37 while the average transaction using a credit card was $84.  While the use of debit cards has overtaken the use of credit cards, the use of credit cards are still preferred for larger (dollar amount) transactions.