Visa, MasterCard See Gold in Prepaid

MasterCard has also been working with tax services provider, H&R Block(HRB Quote - Cramer on HRB - Stock Picks), over the past few years to offer customers prepaid cards with their refund anticipation loans on the cards.

Still, challenges exist in the small but growing market.

Unlike a debit card that may have overdraft protection, customers cannot exceed the amount of money that's on the general purpose reloadable cards when making a purchase. Therefore, it's important that customers be aware of how much money is on the card and are able to get that balance from the merchant. Customers also must be able to use both the card and another form of payment for the same purchase if needed and, most importantly, easily place more money on the card, Visa's Buse says.

Though the uses of prepaid cards will continue to grow strongly over the next few years, they will still represent a tiny fraction of personal consumption expenditures a few years from now, analysts say.

"I think prepaid is a great story, [but it's] going to take many, many years before you start to see prepaid meaningfully impacting Visa's growth prospects," says Aite Group research director Gwenn Bezard. "In order to make a difference in their volumes, you need a lot of transactions. It is a tiny portion of their overall activity."

Most of the growth will have to come from something else -- credit, debit and emerging categories, he adds. "They have to get people to use the accounts more and more, but they have to get people in accounts where they haven't used before," such as bill paying for utility bills, quick service restaurants, and commercial payments.

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