View Point

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Prepaid cards play an important role in South Africa’s efforts towards financial inclusivity by bringing the unbanked and under banked population into the formal banking system and providing them convenient and safe access to financial solutions. However, as compared to other financial cards in South Africa, prepaid cards remain a niche product. Consumer awareness regarding the card category remains low and users tend rely more on traditional payment cards. Creating awareness and driving customer adoption is expected to play a crucial role in increasing prepaid card usage in the country.

Telecom companies in South Africa are introducing prepaid cards linked to mobile money to increase the scope of their services. For instance, Vodacom launched prepaid cards linked to its already existing m-pesa mobile money wallet service. m-pesa service enables customers to store and access their money, transfer money, and purchase airtime using their mobile phones. By offering prepaid cards linked to m-pesa, Vodacom added a new level of functionality to its mobile money service, allowing customers to pay for goods and services at POS terminals in stores.

Transport cards in South Africa are typically closed loop. However, in 2015, to increase the functionality and convenience for customers, South Africa launched a trial for Fair Pay smart-card payment system for minibus taxis in Pietermaritzburg. Commuters could pay for their fare by swiping the Fair Pay transport card on a receiver machine installed in the taxi. The card also allowed them to purchase everyday items such as groceries from retailers and transfer money from one card to another.

Want to gain deeper understanding of prepaid card dynamics in South Africa?

Announcing the ‘Prepaid Cards Market Intelligence’ series – South Africa 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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