The Global Prepaid Market

Financial transaction processing solutions are undergoing rapid market transformation as traditional payments processing, electronic commerce and prepaid processing expand, converge and evolve. An increasing number of consumers are using more types of payment products, more often, with no end in sight to this growth. Debit, credit and prepaid consumer products are converging into consumer services, bundled and unbundled, to meet the needs of individual consumers from the affluent to the un banked.

Several converging trends are contributing to the rising utility and popularity of prepaid services. Traditionally, prepaid card usage was largely corporate driven, most commonly for payroll. In recent years the market for other prepaid services and eCommerce has grown and will continue to grow rapidly for the foreseeable future. This demand is driven by:

          The rising ubiquity of the Internet and eCommerce.
          The ease and need of both domestic and international travel.
          The increasing demand for technology-driven services that require recurring payments.
          The inability for banks and other corporations to extend credit to the masses.

The major markets seeing the highest growth in the prepaid industry are:

1. Cross Border Remittances

Over $US150 Billion per year in cross border remittances is moved globally via various formal and informal channels. New regulations have made it more difficult for informal channels to operate and pricing pressure due to competition gives card-based programs a distinct competitive advantage. As an increasing number of workers travel overseas to seek employment the cross border remittance market will continue to grow. The market is expected to grow at over 10% per year. This growth generates opportunities for new and innovative remittance programs utilizing prepaid cards. The POS transaction processing solutions leverages years of innovation, leadership and experience to produce a formidable transaction processing company that will help you be a leader in your markets.

2. Payroll

In today’s global marketplace employers can easily utilize a workforce that is spread geographically throughout the world. Although this has created an efficient and cost effective way of doing business it has added complexity to the payroll process. The Visa and MasterCard prepaid cards with their multiple functions and global acceptance are perfect solutions to this problem.

3. Electronic Benefits Payments

Both the government and private sectors are seeking methods to decrease cost and increase the efficiency of providing recurring payments to recipients of benefits. This is true in areas of pensions, insurance, healthcare, education and numerous other benefits. The Visa and MasterCard prepaid card products provide these entities with the ability to provide these recurring payments quickly and inexpensively. Funds can be loaded onto cards instantly and the costs associated with processing and mailing checks are eliminated.

4. Telephony and Other Prepaid Services

The market for disparate prepaid services such as telephony, Internet access, ATM usage, micro-payments and purchases at points-of-sale have forced consumers to purchase and reload several different cards to fulfill all their corresponding prepaid needs. Prepaid Visa and MasterCard products converge many of these needs into one card enabling the consumer to carry one card in lieu of many. This creates a card program that increases customer retention and loyalty, and provides multiple revenue sources from one product.

5. Travel Market

Recent years have seen a growing market demand for alternatives to traveler’s checks and credit cards when traveling. This is especially true for international travel. This market demand is driven by:

     a. An increased need for international travel by business persons.
     b. Reductions in the cost of air travel enabling more individuals to travel for leisure.
     c. A marked increase in credit card fraud due to scams such as skimming.

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