What Key Performance Indicators Should You Track for Prepaid Card Programs?

We all know that tracking key performance indicators (KPIs) is a best practice across a broad range of disciplines. It is also a best practice for prepaid card solutions. In the prepaid world, tracking KPIs will help you to:

  • Stay focused on profitability
  • Quickly get a high-level indication of the overall health of your portfolio
  • Uncover actionable insights through data

Given the complexities of the prepaid business model, these points are particularly important. The shorter average lifespan and higher churn rates seen in prepaid cards require that program managers maintain a very tight focus on profitability and uncovering areas for improvement.

Understanding and leveraging your program data to its fullest extent is vital to pulling the right levers on the correct KPIs to maximize your prepaid program. But what are the right KPIs that you should be tracking in your prepaid program?

As we mentioned in an earlier blog post, there are seven KPIs that are absolutely essential for prepaid card processing:

  1. Customer Acquisition Cost
  2. Churn
  3. Card Portfolio Growth Rate
  4. Cash Cost of Service per Card or Account
  5. Net Promoter Index
  6. Average Revenue per Card or Account
  7. Average Margin per Card

Customer Acquisition Cost

Customer Acquisition Cost (CAC) can be looked at as the hole you dig yourself to acquire a customer. The deeper the hole, the longer it takes to emerge to recoup the cost. It is a key expense in any prepaid program and if it’s out of line, it can derail your program from the start.

To keep CAC as low as possible, it is necessary to audit and track the true cost of acquisition and perform break-even analyses to determine when you will recoup these costs. Optimization is also crucial. One i2c client was able to dramatically reduce their acquisition costs by optimizing their marketing efforts through the use of data models. By getting smart about which customers are most likely to enroll and use their card, this client was able to target their acquisition efforts and acquire more customers at a lower cost.


Churn rates in prepaid can be quite a bit higher than what we see in debit or credit cards. It costs much more to acquire new customers than to keep them, so keeping churn rates in check is essential for any program manager. If churn is high, the program will not thrive and over time will become unsustainable.

The key to minimizing churn is to give customers as many reasons as possible to use the card. Using value-added services, loyalty rewards and incentives and promoting features such direct deposit and convenient mobile features are excellent ways to accomplish this. But at the end of the day, it’s all about understanding your customers and ensuring that your product delivers the value they are seeking.

Card Portfolio Growth Rate

To compute the Card Portfolio Growth Rate (CPGR) for a given period, take the net new cards (i.e., new cards activated minus cards closed) and divide by the total active cards in the portfolio. As this metric is based on net new cards, it accounts for churn. To manage the Card Portfolio Growth rate, think along these lines:

  • Develop an unequivocal value proposition for the target market and communicate this promise clearly
  • Enter into strategic partnerships to reach targeted markets
  • Think of ways to make the card part of the customer’s lifestyle so that they depend on it
  • Add services that create stickiness and reduce churn
  • Always look for ways to improve the program and stay relevant in the eyes of customers

Cash Cost of Service per Card or Account

This is the total cost of servicing an account and is comprised of items such as:

  • Customer Service
  • Reload Network Fees
  • ATM & ACH Fees
  • Fraud
  • Processing Fees
  • Compliance Costs

There are numerous opportunities to reduce servicing costs. One of the most common is customer service (which is also one of the largest expenses in any program). Driving customers to use self-service tools like mobile apps, the website, IVR, and mobile account messaging can save tremendously on live agent servicing costs. Inevitably, there will be customers that call the call center, and so focusing on ways to optimize call handling is key.

Net Promoter Index

This measure of customer loyalty and satisfaction is an important metric to know and understand. It is calculated by asking your customers how likely they are to recommend your product, and then subtracting the percentage of detractors from the percentage of promoters. To boost your index, concentrate on giving customers features relevant to their lifestyles, personalizing your interactions with them and giving them ways to provide feedback (they like to know that your listening!).

Average Revenue per Card or Account

On the other side of cost is revenue. Average Revenue per Card is the total gross revenue of your program divided by total active accounts. It’s made of up interchange, card fees and revenue from merchant or partner marketing arrangements. Focus on increasing non-fee based revenue to minimize impact on churn.

Average Margin per Card

This KPI is derived from Customer Acquisition Costs, Cash Cost of Service per Card and Average Revenue per Card. It’s useful in communicating the overall state of affairs to both internal and external stakeholders as it represents the bottom line.

How Often Should You be Tracking These KPIs?

We recommend looking at them on a weekly basis, and at a minimum, every month. Things can change quickly and there can be a thin line between profit and loss. Consistent, regular analysis of KPIs will keep you closer to the inner workings of your program and help you spot trends as soon as they emerge.

Also, download this free eBook “The 7 Laws of Prepaid Success” which provides a deeper overview of KPI’s to help you more effectively run your business.