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Prepaid cards continue to be a niche payment card category in India. This segment has witnessed high adoption over the last five years and is expected to continue recording strong growth over the forecast period as well. The Gross Dollar Value (GDV) of Indian prepaid cards is expected to reach USD 34.4 billion by 2020, posting a CAGR of 24.4% from 2016 to 2020.

Leading Indian banks have launched an instant prepaid card service named Saral Money that enables India’s estimated 400 million strong unbanked and under-banked consumers to purchase a prepaid card from grocery shops, mobile vendors, and banks, using only their Aadhar card for Know Your Customer (KYC) validation. Saral prepaid cards allow users to make online purchases, bill payments, and cash withdrawal, without need for any physical identification proof, which might be difficult for the unbanked population to obtain.

Recent years have seen an increase in transportation card use by commuters using mass transit system (MTS) in metropolitan cities. In July 2015, the Reserve Bank of India allowed MTS operators, including metro rail networks and Indian Railways, to issue their own prepaid cards. This has led to several leading banks collaborating with MTS operators and introducing special prepaid cards that can be used as a transport card as well as for making purchases at merchant outlets, for online payments, and cash withdrawals from ATMs.

Gift card market in India is registering a strong growth. Increased usage of smartphones and digital wallets in the country is contributing to an increasing demand for digital gift cards in India. To leverage on this trend, some gift card companies in India are taking steps to launch online gift card stores that are mobile responsive.

Few mobile wallet providers in India have entered the prepaid card market by collaborating with financial services companies and launching their own virtual prepaid cards. This move is beneficial in two ways; one it allows mobile wallet providers to participate in a high growth market and second, virtual prepaid cards can be used to make purchases on those e-retailer sites that generally do not allow consumers to use competing mobile wallets.

India is also witnessing use of prepaid cards in development and social welfare projects. In 2015, the Indian government installed water ATMs in regions suffering from water deficit, and issued prepaid cards that helped consumers in accessing them. Using the prepaid card, Indians could buy water through the ATM type machine at a nominal cost.  

 

Want to gain deeper understanding of prepaid card dynamics in India?

Announcing the ‘Prepaid Cards Market Intelligence’ series – India 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:

  • Market dynamics: Provides a comprehensive view on size and structure, industry dynamics, market trends, consumer attitude and behaviour, and competitive landscape in prepaid card industry.
  • Open loop and closed loop: Provides market estimates and forecasts to assess opportunities in open loop and closed loop prepaid market segments. Details four essential KPIs – number of cards in circulation, numbers transactions, load value, and value of transactions.
  • Prepaid card categories: Details market opportunities across 11 market segments in prepaid cards for the period 2011-2020 and identifies potential risks, and consumer adoption. Card categories include – Gift Cards, Teen and Campus Cards, General Purpose Reloadable Cards, Remittance Cards, Travel Cards, Business Expense Cards, Payroll Cards, Corporate Incentive Cards, Consumer Incentives, Government Benefit & Other Program Cards, Healthcare & Insurance Cards.
  • Benchmarking and risk index: Benchmarks the prepaid card industry in the country with key global markets along with a risk assessment through PayNXT360’s proprietary Prepaid Cards Industry Risk Index (PCIRI).
  • Consumer attitude and behaviour: Drawing from proprietary survey results, this report identifies and interprets key prepaid KPIs, including spend by age, gender, and income level. In addition, it provides an overview of how consumers are currently using prepaid cards across five key categories – travel, bill payment, retail spend, cash withdrawal, and P2P transfers. It also provides a breakdown by transaction size.
  • Retail spend: Breaks down retail spend across 11 categories to provide detailed insights on consumer behaviour and changing dynamics of prepaid card spend.
  • Gift cards: Drawing from proprietary survey results, this report provides in-depth analysis of opportunities in both open loop and closed loop prepaid gift card categories. Assesses consumer behaviour by type of consumer (retail and corporate), gifting occasion, card type (paper, plastic, digital), and market share by retail categories.
  • Innovation and market strategies: Explores prepaid card strategies, including innovations across categories, competitive positioning, and new product launches.

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