Prepaid cards are increasingly being use by Australian consumers to meet different requirements such as for international travel, gifting, transport, or for purchasing everyday items. As entry of new players heats up the competition in the market, companies are relying on introducing innovative products and services to differentiate their offerings and capture market share.
The growth potential of Australian prepaid card market remains high. The market in terms of Gross Dollar Value (GDV) is expected to record a CAGR of 14.5% from 2016 to 2020, to reach USD 14.1 billion by 2020.
Over the last five years, Australian travellers have shown a marked preference towards use of prepaid travel cards. To capitalize on this trend, recent years have seen introduction of travel prepaid cards that are specifically designed to target a niche within the segment. For instance, travel prepaid cards have been launched that are connected to an airline’s frequent flyer program. These include, Qantas Cash and Virgin Global Wallet, which were launched by Qantas and Virgin Airlines, respectively to leverage on their strong position in the travel and tourism industry. These prepaid cards are promoted as convenient tools that enable cardholders to load multiple foreign currency balances onto the card and allow accrual of frequent flyer points.
Public sector firms are focusing on overseas partnerships to drive revenue growth through prepaid travel cards. Government-owned entity Australia Post collaborated with China Union Pay (CUP), to sell CUP’s multi-currency prepaid travel payment cards in Australia. Introduced in 2015, Australia Post’s new travel card, Load&Go China allows Australians to purchase and pre-load their travel cards with both Chinese Yuan and Australia Dollars. The card can be used anywhere on the global UnionPay acceptance network and for making online payments.
The Australian gift card market has become more sophisticated. While gift cards are predominantly marketed as an alternative to giving presents on special occasions, they are seeing increasing use by businesses as part of their broader business strategy, for promotions and to achieve other marketing objectives.
Overall, we expect a number of initiatives across prepaid card segment over the next five years, driving innovation and growth. Key focus areas include integration of prepaid cards with mobile application, use of prepaid cards for micro financing, and increased focus on targeting teens and millennials.
Want to gain deeper understanding of prepaid card dynamics in Australia?
Announcing the ‘Prepaid Cards Market Intelligence’ series – “Australia Prepaid Cards Business and Investment Opportunities – Market Size and Forecast (2011-2020), Targeting Strategies, Analysis of Business Trends, Consumer Attitude & Behaviour, Retail Spend, Market Risk, Competitive Landscape and Market Innovation”.
This report from PayNXT360 provides a strategic analysis of prepaid (pay before) cards, offering a wealth of insights to help companies understand this growing but quickly changing market: