Rise of the Stored Value Card Industry

Since their emergence as the latest merchandise of the financial industry in the early '90s, stored value cards (SVCs) have got go the fastest growth financial merchandise on the market.

The first SVCs were introduced by choice retail merchants that issued them as gift cards; essentially electronic gift certificates. With a gift card, the lone cost to consumers is the exact dollar value of the finances they put on each card. These first SVCs were known as "closed loop" cards, which could only be used to do purchases from the retail merchant that issued the card. For example, a Sears gift card tin only be used at any Sears shop worldwide.

Other closed cringle cards include SVCs that tin only be used to purchase specific commodity or services, such as as as gas cards or medical insurance cards, or cards that can only be used at one specific topographic point of business such as a promenade or small business.

The popularity of closed cringle SVCs led to the development of "open loop" cards that are functionally similar to debit entry or credit cards. Often sporting the Visa, MasterCard or Discover logos, unfastened cringle SVCs can be used to do any purchase from any retail merchant that accepts credit cards. Their more than flexible disbursement allowances have got led to open up cringle SVCs becoming the leading SVC in usage today.

As an estimated $38-$45 billion industry in 2003, the SVC industry is projected to account for $72 billion in transactions for 2006 alone. There are an estimated 2,000 SVC programs in being today with 20 million potentiality users.

The SVC industry is expected to go on its explosive growing well into the future.