Opportunities for Efficiency with RAN Prepaid Programs

September 19, 2018         By: Michael Millington

Sponsored by Discover® Global Network

The prepaid industry has experienced a steady rise in general use. Mercator Advisory Group reported that prepaid will see a 5% growth in open-loop loads in the United States, reaching total loads of $353.6 billion by 20201. Open-loop Restricted Authorization Network (RAN) programs, in particular, are increasingly viewed as a viable payment solution for a variety of institutions looking to improve payment efficiency.

There are several open-loop prepaid segments that stand to benefit from RAN programs. These include general purpose reloadable (GPR) cards, campus cards, in-store gift cards and health benefit cards.

RAN-Driven Efficiencies

Low production costs and flexible offerings may allow prepaid products to lend their application to a variety of institutions.

For example, by utilizing an open-loop GPR network, business owners can offer a convenient and reliable expense management solution that combines standard prepaid offerings, like loading and spending allocated funds, with a unique mobile app.

As more companies look to integrate custom payment experiences for their customers, some analysts predict that we can expect to see GPR loads increase by 5% through 2020, reaching $116.8 billion total loads2, a growth rate mirroring the open-loop prepaid industry as a whole.

Another use case for open-loop RAN was created by a chain of convenience stores in the southwest region of the United States. Through the flexibility of the Discover® Global Network payment system, this company allowed customers to use their reloadable gift card at any participating location, across multiple point-of-sale systems for fuel and in-store purchases. This prepaid offering operates on open-loop network rails, but leverages a RAN solution to create a restricted gift program for only the participating storefronts.

Before payments were implemented, campuses typically utilized cards for easy identification and access when needed. However, with open-loop RAN programs, various campus-specific functions can now be carried out with relative ease, such as paying for lunch, purchasing books, or using a vending machine. Some cards can receive and store government funding from loans or work study program stipends directly onto the card, providing a discrete alternative for students to receive aid.

Due to the convenience of open-loop campus cards and the rising costs of tuition, these cards are projected to have an annual growth of 3% through 2020, reaching $3.15 billion in total loads3.

Open-loop benefit cards dispense funds that are tax deferred. This would include health spending accounts. FSA and HSA cards give individuals the ability to easily access their money for applicable purchases. Whether getting prescription medication or handling a co-pay, these benefit cards allow for easier transactions.

As of 2016, FSA and HSA card loads reached $21.9 billion4 and are predicted to have a CAGR of 15% through 20205. With more employers using these open-loop cards to supply their employees with health benefits in a more secure and convenient manner, this segment is poised for tremendous growth.

Prepaid Won’t Go Ignored

Prepaid options continue to show diversity and ease of consumer use, which is aided by the flexibility and efficiency that products, like RAN, deliver.

  • GPR cards enable consumers to make quick purchases at select distributing retail stores.
  • In-store gift cards provide customers with an alternative to carrying large amounts of cash while still being able to take advantage of loyalty program rewards.
  • Campus prepaid cards allow students and employees alike to have an easy and accessible form of contact with their funds for a multitude of reasons.
  • Prepaid health cards allow for those in need to have access to payment health care, prescriptions, and co-pays without needing to spend money they don’t have.

These benefits alone make RAN prepaid programs a formidable offering in the payments world.

The information provided herein is sponsored by Discover® Global Network. It is intended for informational purposes, and is not intended as a substitute for professional advice.


1 “14th Annual U.S. Open-Loop Prepaid Cards Market Forecasts,” Mercator Advisory Group, 2017–2020 (pg. 4)

2 “14th Annual U.S. Open-Loop Prepaid Cards Market Forecasts,” Mercator Advisory Group, 2017–2020 (pg. 9-10)

3 “14th Annual U.S. Open-Loop Prepaid Cards Market Forecasts,” Mercator Advisory Group, 2017–2020 (pg. 17)

4 “14th Annual U.S. Open-Loop Prepaid Cards Market Forecasts,” Mercator Advisory Group, 2017–2020 (pg. 30)

5 “14th Annual U.S. Open-Loop Prepaid Cards Market Forecasts,” Mercator Advisory Group, 2017–2020 (pg. 30)