Newcastle Building Society Card Solutions, a provider of MasterCard prepaid cards, has predicted a 10% growth in the number of prepaid cards used by people with individual voluntary arrangements (IVAs) by 2012.

By this time next year, the total number of issued prepaid cards in the UK is estimated to reach over 10.8 million and the total value spent on these cards is expected to exceed £697 million, the research found. The Newcastle added that over the next four years there will be further exceptional growth from migrant workers as well as people in IVAs.

Prepaid cards do not allow credit options and once funds on the cards are spent the card must be topped up before using it again. These measures offer customers in IVAs a very real opportunity to manage their finances. While this card use accounts for only 1% of all cards used by Newcastle Building Society Card Solutions at present, it predicts that this area will grow to 10% of the market as a whole by 2012.

The use of prepaid cards among migrant workers without access to a UK bank account has also seen particular growth, as they offer a cost-efficient option to share money with family back home.

Kriya Patel, Head of Card Solutions at Newcastle Building Society, commented, "The popularity of prepaid cards over the last couple of years is astounding. Newcastle Building Society Card Solutions has been an issuing bank for these card schemes since 2005, and the number and diversity of the schemes available increases each month. We have currently issued 2.3 million cards across the UK and within Europe and have launched 100 schemes to date.

"The safety offered by the cards is also appealing within the teen, travel and online community, protecting access to people’s money and identity. Prepaid cards are now seen by many as the next logical step toward a cashless society and the flexibility and opportunity these cards offer certain sectors of the population is undeniable."

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