Recent trends and developments in the Indian prepaid card market

Recent trends and developments in the Indian prepaid card market

Recent trends and developments in the Indian prepaid card market

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The payment ecosystem in India is evolving, and the country is moving towards a cash-light economy owing to the regulatory changes, the government's Digital India vision, and RBI's constructive policies. Prepaid cards, UPI payments, QR codes, and NFC-based payments are a few noteworthy transformations in the payments industry. The prepaid card market in India is booming due to the increasing cashless payments, growing adoption of artificial intelligence (AI) and the Internet of Things (IoT), the rising eCommerce sector, and the growing number of the unbanked population.

According to PayNXT360, the Indian prepaid market value is increased at a CAGR of 19.9% from 2017 to 2021. The market value is expected to increase from US$ 35.69 billion in 2022 to US$ 105.43 billion by 2026 by recording a CAGR of 31.1% during the forecast period. Increasing urbanization, low cost of domestic airfares, and rising per capita income have led to the increasing adoption of prepaid travel cards in the country. Additionally, many companies offer prepaid meal cards, such as Sodexo and Zeta, as part of employee benefit schemes. 

Recent developments in the Indian prepaid card market:

  • Zigii, a neobank, announced that it collaborated with Decentro, an API banking infrastructure platform, in May 2022. Under this collaboration, the bank aims to launch co-branded prepaid cards for younger populations such as gen Z, teenagers, and young adults. Users can sign-up for this co-branded wallet and can receive either a virtual or a physical prepaid card. This prepaid card can work online and offline at all places, and users can load money depending on their KYC.
  • PayCraft Solutions Private Ltd., a fintech firm involved in offline or contactless payments, has announced plans to introduce retail and corporate prepaid cards in May 2022. The company is planning to roll out National Common Mobility Card (NCMC) specifications-enabled retail prepaid card and an expense-managing platform that can work for making payments during transit travel. This prepaid card consists of multi-wallet features that benefit corporates in managing their employee's reimbursement for tax benefits and other expense wallet categories.
  • English, a spend management platform, launched a card API suite CardX in May 2022. The card enables multiple use cases of credit cards, wallets, and prepaid cards. Businesses can issue credit and prepaid cards to their customers, users, and agents by using EnKash's open API stack.
  • In January 2021, ICICI bank partnered with fintech company Niyo to issue prepaid cards for micro, small, and medium enterprises (MSMEs) workers. These MSMEs can upload their workers' salaries on the "ICICI Bank Niyo Bharat Payroll Card" for their underbanked blue-collar workers. The prepaid card allows users to receive up to one lakh funds into the card account. 

The prepaid cards market is exponentially growing with the increasing usage of gift cards, travel cards, meal cards, and payroll cards. In payroll cards, organizations using open-loop cards that allow salaries to be credited to cardholder's accounts in real-time are gaining much attraction. In addition, prepaid cards are one of the most popular payment methods for government benefits as they are cost-effective and provide greater flexibility to recipients when they can access their benefits. The major players in this space are actively involved in product innovations and collaborations with API platforms to provide their users with easy and multipurpose payment options. 

To know more and gain deeper a understanding of the prepaid card market in India, click here.

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