Cover Story
Banking & Payments Asia
Edition 20, October 2010
Prepaid Summit South Asia 2010 in Mumbai last month brought together experts and thought leaders in the prepaid industry to discuss opportunities for financial institutions, retailers and government agencies in the prepaid space. Delegates from across the globe attended the inaugural event. Shubhreet K reports
There is no doubting that the future of not just the banking industry but many others relies on the success of the prepaid platform. Prepaid has been highlighted as an ideal consumer and corporate tool to cut costs and control spending. Whether you are a bank, a retailer or a government agency, there will always be a need to innovate and look for new ways of generating revenue. A prepaid platform can be that innovative solution across industries.
The Prepaid Summit provided insights from banks that have successfully implemented prepaid programmes as well as ideas, case studies and presentations from different stakeholders who will be driving growth in this segment in the future.
Awareness Visa conducted a research across six major cities in India – Bangalore, Chennai, Delhi, Hyderabad, Kolkata and Mumbai – to investigate prepaid awareness and usage levels among Indian consumers. Only 2 percent of the respondents owned prepaid cards where as 87 percent owned debit cards and 27 percent owned credit cards.
Erode S (Neel) Nilakantan, regional director of prepaid products, Visa, said: “India is traditionally a cash market; prepaid payment cards are a nascent category. About 40 percent of respondents were aware of prepaid cards as a payment option but only 2 percent own such cards. There is an untapped potential for issuers. 84 percent of respondents said they would like to try a prepaid payment card, once the concept was explained.”
Growth Potential There was agreement all around on the immense opportunities in the prepaid space in India. Prepaid products have high adoption in countries like US, UK, Russia and Italy. However, there are challenges in increasing the adoption rate in countries such as India. But the expectations from the Indian market are high.
Laura Kelly, group executive, global prepaid solutions, Mastercard Worldwide, said: “Asia is leading the global economic recov- ery and India is an important part of it. We don’t just see prepaid taking off in India; we see India leading the world in terms of innovations and new ideas.”
According to the Boston Consulting Group’s (BCG) Prepaid Market Sizing Report 2010, the global prepaid market is expected to reach $1.9 trillion by 2017. The global open loop prepaid market is likely to top $840 billion. In India, the branded prepaid market is expected to reach $60 billion in 2017. Saurabh Tripathi, partner and director, BCG India, said: “India’s open loop gross dollar volume is expected to grow from $4 billion in 2009 to US$ 59 billion in 2017. Currently, the market is primarily made up of corporate spends and consumer reloadable cards. We see multiple positioning alternatives but 83 percent of the opportunity lies in the unbanked and the underbanked segment.”
The large unbanked segment in India is expected to become bankable in the coming years but it will demand low cost banking segments. Tripathi explained: “The low-cost model is not new to India. We have low-cost airlines, low-cost hotels, etc, and all these models are profitable. But we have yet to unearth low cost banking and prepaid can unlock this potential. It is not just a commercial opportunity, but a political urgency.” He explained that the segment at the bottom of the pyramid requires a different business model and that bankers need to treat it as a separate business. There is a notion that prepaid cards are only for unbanked and underbanked segments. However, latest developments have shown that the product can appeal to a much wider segment.
Naveen Surya, managing director, ItzCash, explained: “Most banks focus on the top 10 percent of population in India who use credit and debit cards. The regulators are focusing on the bottom 20 percent. The 70 percent of the population in the middle is being ignored. Some of these are banked and some are unbanked but they have money and they do spend. Most of these transactions are done in cash and this is a low hanging fruit that banks can tap through prepaid.”
Surya also added that banks need multiple solutions to solve the problems in this segment. People prefer cash because procedures for getting a card are usually long and tiring. Hence, the aim is to compete with cash as a product.
Opportunities
• Mobile technology: The partnership between mobile technology and prepaid is another aspect that is gaining momentum. According to the IBA-BCG survey, all private sector and public sector banks felt that mobile banking would see an explosive growth. BCG expects 250 million-300 million mobile internet users by 2020.
Tripathi added: “There are three imperatives for banks that will help drive prepaid in the future – next-generation, low-cost banking with prepaid technology at the core; integration with mobile phones; and interoperability. Credit cards and debit cards are hitting a cost barrier that we need to break through. If we combine prepaid with mobile technology, we can achieve a low cost model which will eventually cause a jump in acceptance.”
David Parker, CEO, Polymath Consulting, gave an example of a prepaid card on mobile issued by the National Bank of Kuwait. There are special offers that are provided through smart posters powered by near- field communication (NFC) technology. The smart posters are used to drive sales through personalised profile and location-based promotions. All the customer has to do is tap the smart poster at retailer and his or her tag ID information is sent to the bank to complete the transaction.
Stressing on the importance of mobile technology in partnership with prepaid, Vivek Saxena, co-founder and CEO, ZipCash, said: “There is an explosion of mobile population. Through collaborative efforts, a ‘branchless banking mobile money’ model can be constructed. India has a mobile user base of 600 million. This offers huge growth opportunities.”
Kelly added: “Prepaid has created an opportunity for banks to partner with non- banks. We see telecom companies as important partners in the future.”
• Public sector and e-governance: Governments across the world are driving initiatives towards e-governance and making their payments system more efficient. Governments in Asia-Pacific are trying to eliminate voucher and cash based payments. There is also a necessity to reduce operational costs, improve security and especially, guarantee the delivery of benefit payments. Several pension and social benefits programs face problems in administration and performance in terms of higher costs and poor beneficiary service. Prepaid cards help tackle these loopholes. Governments are beginning to use prepaid cards for making payments such as payroll, unemployment benefits, pension payments, disability benefits, disbursements, food vouchers etc.
Sanjeev Jain, director, public sector head, Asia-Pacific, Citi Global Transaction Services, said: “Prepaid offers benefits both for the public sector client as well as the recipient. The client is guaranteed an efficient payment delivery, fraud protection, less payment inquiries, reduced paperwork, better auditing and most of all, a convenient and low cost solution.”
“It provides greater convenience for the recipient as well. The funds are immediately available, there’s universal Visa/MasterCard acceptance, ATM access, fraud protection, email/text alerts and robust payment tracking,” Jain added.
Other Opportunities Besides the unbanked and underbanked segment, prepaid opportunities lie in many other areas as well such as travel cards, transit cards, incentive cards, gift cards, add-on cards etc. Nilakantan said: “Prepaid is the most effective product to replace cash and it can provide unique electronic payment solutions for segments that are not served by credit and debit.”
Explaining the advantages of a prepaid travel card, Navtej Singh, head, direct pay- ment products, HDFC Bank, said: “We need to have simple secure safe instruments for cash/paper-based transactions. Retail customers can use travel cards for foreign vacation and leisure travels, education or visiting non-resident Indian relatives. Corporate travel includes business trips and international conferences. For both these segments, the customer is given a secure, hassle-free and convenient single card.”
Singh highlighted various transit cards that can be used, including cards for payment of tolls. Corporate travel cards and incentive cards is a segment that is already prevalent in most countries and is picking up pace.
Sibel Mangup, director of commercial cards, Garanti Bank, shared her experience with prepaid cards in Turkey. “We provide corporate loaded prepaid cards in the business-to-employee, business- to-business and business-to-consumer segments, and the corporate travel card is one of our products along with corporate incentive cards,” Mangup said. “The travel cards are provided for the employee to use for business expenses. When compared to a corporate credit card, a travel prepaid card helps the employer control the funds used by the employee. The incentive cards have also proved to be quite popular when a company needs to give a bonus or incentive to consumers or employees.”
Motaz Saeed, head of marketing and business development, Sharjah Islamic Bank, described his experience with prepaid cards in the UAE. “We launched a prepaid card called the ‘Jeans Card’ that was primarily targeted at the young population,” Saeed said. “But we saw a huge response from the other segments also including debit and credit card holders. Parents used the card to give allowance to their children instead of giving them cash. Since we provide SMS alerts for every transaction, parents could also keep a track of where their children were spending the money. Families also gave the card to their drivers and servants for grocery shopping and thus were able to keep better records of their financials. The same prepaid card was also being used as a gift card during festive season or birthdays.”
Saeed gave another example where the Dubai financial market is distributing dividends to investors through prepaid cards.
Challenges Even though the growth potential in the prepaid space is immense, and there is a lot of room for innovation, there are challenges that first need to be tackled before this mass potential can be unlocked.
Financial Inclusion The IBA-BCG survey of banks revealed only 14 percent of public sector and 9 percent of private sector banks felt a solution to financial inclusion would be found in the coming years. The confidence of banks on tackling the problem of financial inclusion is not very high at the moment. India’s banks cater to only 5 percent of villages despite the network of 82,000 bank branches of commercial banks across the country. Around 40 percent of rural residents lack access to bank accounts.
Saxena said: “The banking sector has not been able to extend its presence in the rural regions and among the poor of the country precisely because of the fundamental mismatch between the need of the banks and the needs of the consumers.”Regulators in India have been aggressive in setting up a conducive policy environment. However, the cost of micro transactions is still very high. Banks consider the costs of providing financial services to the poor, who transact in smaller amounts, unattractive. Know your customer (KYC) challenges also continue to exist despite reduced KYC norms.
Mohan Jayaraman, head of cards, ICICI Bank said: “Prepaid offers security and convenience. Hence both the high end and low end of the population would want to buy in. But financial inclusion in the low-end segment still needs to be worked out. The next frontier of growth will come from evolved segments and financial inclusion.”
Jain also expressed his concerns on financial inclusion: “There are challenges on costs and distri- bution but the building blocks are in place.” He added, “Asia is still in a nascent stage but there is a lot of active dialogue and innovation going on. Governments and banks need to share best practices with each other to make the system work.”
Building scale In order for a prepaid product portfolio to be profitable, a large-scale build up is crucial. Kelly explained: “No portfolio, whether it is debit, credit or prepaid, is a 100 percent profitable. Some products are and some are not. In the case of prepaid products, the incremental costs are high but the margins for issuers are low. Hence, scale is very important for a prepaid card to be successful.”
There is a whole spectrum of options that can be turned into viable products using a prepaid platform. Prepaid can be a complimentary product but it needs a large custom- er base in order to make money. The Indian market is very large and therefore, an issuer cannot just focus on one product or segment.
Surya said: “In order to build scale, we need to find people who can educate the customers. We cannot just assume that if we have a retail reach, then the consumer will buy the product.” Consumer education and distribution is key to bringing in a large number of customers. The value proposition of the product needs to be clearly communicated to the end consumer.
According to Singh: “Unless we build scale, it will not make material sense to issue prepaid cards. The margins in these cards are too low. However, on the positive side, there are enough variations in prepaid and each variation is an opportunity in itself.”
Jayaraman recommended a ‘test and scale’ approach. “Multiple segments can grow at the same time,” he explained. “We need to test and scale these segments. Some will work and some will not. The ones that do work will need further investment and then the focus can be shifted to boosting scale of those segments. Experimenting is the cost of staying in the business.”
The Road Ahead Innovation is the name of the game and prepaid is probably one of the best opportunities in banking where innovation can reach new heights.
Parker explained: “True innovation comes from a deep understanding of your customers – their problems, their needs, expressed or unexpressed. Innovation does not necessarily have to be about bringing in the latest and most expensive technology. It can also be about making things cheap. We need to understand the customers’ perception of innovation and whether they will pay for it.”
Kelly said: “There is a strong future in prepaid in India. But in case of a product like prepaid cards, differentiation can be created through simplicity. We need to customise and work on the needs and requirements of the market we want to tap. The key is not to be hopefully global, but to be mindfully local.”
Prepaid can also be a way to get customers into your portfolio. Once they are in, they can later be upgraded to a credit or debit card if needed. The prepaid platform makes it easier to innovate and load more features and function on one single card. In some ways, it can be called an emerging vehicle for a financial institution.
“Prepaid is a strong complimentary product for debit and credit card,” said Nilankantan. “Look at it as the third leg of the payment tool. It can address certain specific segments. It will co-exist with closed-loop and semi-closed loop systems. India is too large to be addressed by just one type of product.”
According to Singh: “People are already moving away from the culture of money in an envelope as a gift to prepaid gift cards. That is just one segment. The shift towards cashless transactions is already on the go and the future ahead is a strong one.”
Talking about partnerships in the future, Jayaraman said: “Instead of competing with each other, the various stakeholders should stick to their core competencies and then partner with each other to deliver the final product.”
Saxena concluded his presentation by saying: “Co-existence, collaboration and interoperability between – banks and non-banks, and national and regional players – is the key to success. There is also a need for continuous evolution in policy and IT innovation. We need customer transactions, not just acquisitions.”
There is no doubting the fact that prepaid cards are emerging as the growing payment card segment with adoption by consumers, businesses and government agencies across the world. However, there are barriers that the industry participants have to first over- come before they plan their market strategies to tap into the various segments in this market.
The key words for the future are – innovation, partnership and interoperability.
The prepaid platform cannot be fully exploited to its maximum potential unless all stakeholders and participants come together to create solutions that can change the face of the payment industry not just in India but globally.
Banking & Payments Asia
Edition 20, October 2010
Prepaid Summit South Asia 2010 in Mumbai last month brought together experts and thought leaders in the prepaid industry to discuss opportunities for financial institutions, retailers and government agencies in the prepaid space. Delegates from across the globe attended the inaugural event. Shubhreet K reports
There is no doubting that the future of not just the banking industry but many others relies on the success of the prepaid platform. Prepaid has been highlighted as an ideal consumer and corporate tool to cut costs and control spending. Whether you are a bank, a retailer or a government agency, there will always be a need to innovate and look for new ways of generating revenue. A prepaid platform can be that innovative solution across industries.
The Prepaid Summit provided insights from banks that have successfully implemented prepaid programmes as well as ideas, case studies and presentations from different stakeholders who will be driving growth in this segment in the future.
Awareness Visa conducted a research across six major cities in India – Bangalore, Chennai, Delhi, Hyderabad, Kolkata and Mumbai – to investigate prepaid awareness and usage levels among Indian consumers. Only 2 percent of the respondents owned prepaid cards where as 87 percent owned debit cards and 27 percent owned credit cards.
Erode S (Neel) Nilakantan, regional director of prepaid products, Visa, said: “India is traditionally a cash market; prepaid payment cards are a nascent category. About 40 percent of respondents were aware of prepaid cards as a payment option but only 2 percent own such cards. There is an untapped potential for issuers. 84 percent of respondents said they would like to try a prepaid payment card, once the concept was explained.”
Growth Potential There was agreement all around on the immense opportunities in the prepaid space in India. Prepaid products have high adoption in countries like US, UK, Russia and Italy. However, there are challenges in increasing the adoption rate in countries such as India. But the expectations from the Indian market are high.
Laura Kelly, group executive, global prepaid solutions, Mastercard Worldwide, said: “Asia is leading the global economic recov- ery and India is an important part of it. We don’t just see prepaid taking off in India; we see India leading the world in terms of innovations and new ideas.”
According to the Boston Consulting Group’s (BCG) Prepaid Market Sizing Report 2010, the global prepaid market is expected to reach $1.9 trillion by 2017. The global open loop prepaid market is likely to top $840 billion. In India, the branded prepaid market is expected to reach $60 billion in 2017. Saurabh Tripathi, partner and director, BCG India, said: “India’s open loop gross dollar volume is expected to grow from $4 billion in 2009 to US$ 59 billion in 2017. Currently, the market is primarily made up of corporate spends and consumer reloadable cards. We see multiple positioning alternatives but 83 percent of the opportunity lies in the unbanked and the underbanked segment.”
The large unbanked segment in India is expected to become bankable in the coming years but it will demand low cost banking segments. Tripathi explained: “The low-cost model is not new to India. We have low-cost airlines, low-cost hotels, etc, and all these models are profitable. But we have yet to unearth low cost banking and prepaid can unlock this potential. It is not just a commercial opportunity, but a political urgency.” He explained that the segment at the bottom of the pyramid requires a different business model and that bankers need to treat it as a separate business. There is a notion that prepaid cards are only for unbanked and underbanked segments. However, latest developments have shown that the product can appeal to a much wider segment.
Naveen Surya, managing director, ItzCash, explained: “Most banks focus on the top 10 percent of population in India who use credit and debit cards. The regulators are focusing on the bottom 20 percent. The 70 percent of the population in the middle is being ignored. Some of these are banked and some are unbanked but they have money and they do spend. Most of these transactions are done in cash and this is a low hanging fruit that banks can tap through prepaid.”
Surya also added that banks need multiple solutions to solve the problems in this segment. People prefer cash because procedures for getting a card are usually long and tiring. Hence, the aim is to compete with cash as a product.
Opportunities
• Mobile technology: The partnership between mobile technology and prepaid is another aspect that is gaining momentum. According to the IBA-BCG survey, all private sector and public sector banks felt that mobile banking would see an explosive growth. BCG expects 250 million-300 million mobile internet users by 2020.
Tripathi added: “There are three imperatives for banks that will help drive prepaid in the future – next-generation, low-cost banking with prepaid technology at the core; integration with mobile phones; and interoperability. Credit cards and debit cards are hitting a cost barrier that we need to break through. If we combine prepaid with mobile technology, we can achieve a low cost model which will eventually cause a jump in acceptance.”
David Parker, CEO, Polymath Consulting, gave an example of a prepaid card on mobile issued by the National Bank of Kuwait. There are special offers that are provided through smart posters powered by near- field communication (NFC) technology. The smart posters are used to drive sales through personalised profile and location-based promotions. All the customer has to do is tap the smart poster at retailer and his or her tag ID information is sent to the bank to complete the transaction.
Stressing on the importance of mobile technology in partnership with prepaid, Vivek Saxena, co-founder and CEO, ZipCash, said: “There is an explosion of mobile population. Through collaborative efforts, a ‘branchless banking mobile money’ model can be constructed. India has a mobile user base of 600 million. This offers huge growth opportunities.”
Kelly added: “Prepaid has created an opportunity for banks to partner with non- banks. We see telecom companies as important partners in the future.”
• Public sector and e-governance: Governments across the world are driving initiatives towards e-governance and making their payments system more efficient. Governments in Asia-Pacific are trying to eliminate voucher and cash based payments. There is also a necessity to reduce operational costs, improve security and especially, guarantee the delivery of benefit payments. Several pension and social benefits programs face problems in administration and performance in terms of higher costs and poor beneficiary service. Prepaid cards help tackle these loopholes. Governments are beginning to use prepaid cards for making payments such as payroll, unemployment benefits, pension payments, disability benefits, disbursements, food vouchers etc.
Sanjeev Jain, director, public sector head, Asia-Pacific, Citi Global Transaction Services, said: “Prepaid offers benefits both for the public sector client as well as the recipient. The client is guaranteed an efficient payment delivery, fraud protection, less payment inquiries, reduced paperwork, better auditing and most of all, a convenient and low cost solution.”
“It provides greater convenience for the recipient as well. The funds are immediately available, there’s universal Visa/MasterCard acceptance, ATM access, fraud protection, email/text alerts and robust payment tracking,” Jain added.
Other Opportunities Besides the unbanked and underbanked segment, prepaid opportunities lie in many other areas as well such as travel cards, transit cards, incentive cards, gift cards, add-on cards etc. Nilakantan said: “Prepaid is the most effective product to replace cash and it can provide unique electronic payment solutions for segments that are not served by credit and debit.”
Explaining the advantages of a prepaid travel card, Navtej Singh, head, direct pay- ment products, HDFC Bank, said: “We need to have simple secure safe instruments for cash/paper-based transactions. Retail customers can use travel cards for foreign vacation and leisure travels, education or visiting non-resident Indian relatives. Corporate travel includes business trips and international conferences. For both these segments, the customer is given a secure, hassle-free and convenient single card.”
Singh highlighted various transit cards that can be used, including cards for payment of tolls. Corporate travel cards and incentive cards is a segment that is already prevalent in most countries and is picking up pace.
Sibel Mangup, director of commercial cards, Garanti Bank, shared her experience with prepaid cards in Turkey. “We provide corporate loaded prepaid cards in the business-to-employee, business- to-business and business-to-consumer segments, and the corporate travel card is one of our products along with corporate incentive cards,” Mangup said. “The travel cards are provided for the employee to use for business expenses. When compared to a corporate credit card, a travel prepaid card helps the employer control the funds used by the employee. The incentive cards have also proved to be quite popular when a company needs to give a bonus or incentive to consumers or employees.”
Motaz Saeed, head of marketing and business development, Sharjah Islamic Bank, described his experience with prepaid cards in the UAE. “We launched a prepaid card called the ‘Jeans Card’ that was primarily targeted at the young population,” Saeed said. “But we saw a huge response from the other segments also including debit and credit card holders. Parents used the card to give allowance to their children instead of giving them cash. Since we provide SMS alerts for every transaction, parents could also keep a track of where their children were spending the money. Families also gave the card to their drivers and servants for grocery shopping and thus were able to keep better records of their financials. The same prepaid card was also being used as a gift card during festive season or birthdays.”
Saeed gave another example where the Dubai financial market is distributing dividends to investors through prepaid cards.
Challenges Even though the growth potential in the prepaid space is immense, and there is a lot of room for innovation, there are challenges that first need to be tackled before this mass potential can be unlocked.
Financial Inclusion The IBA-BCG survey of banks revealed only 14 percent of public sector and 9 percent of private sector banks felt a solution to financial inclusion would be found in the coming years. The confidence of banks on tackling the problem of financial inclusion is not very high at the moment. India’s banks cater to only 5 percent of villages despite the network of 82,000 bank branches of commercial banks across the country. Around 40 percent of rural residents lack access to bank accounts.
Saxena said: “The banking sector has not been able to extend its presence in the rural regions and among the poor of the country precisely because of the fundamental mismatch between the need of the banks and the needs of the consumers.”Regulators in India have been aggressive in setting up a conducive policy environment. However, the cost of micro transactions is still very high. Banks consider the costs of providing financial services to the poor, who transact in smaller amounts, unattractive. Know your customer (KYC) challenges also continue to exist despite reduced KYC norms.
Mohan Jayaraman, head of cards, ICICI Bank said: “Prepaid offers security and convenience. Hence both the high end and low end of the population would want to buy in. But financial inclusion in the low-end segment still needs to be worked out. The next frontier of growth will come from evolved segments and financial inclusion.”
Jain also expressed his concerns on financial inclusion: “There are challenges on costs and distri- bution but the building blocks are in place.” He added, “Asia is still in a nascent stage but there is a lot of active dialogue and innovation going on. Governments and banks need to share best practices with each other to make the system work.”
Building scale In order for a prepaid product portfolio to be profitable, a large-scale build up is crucial. Kelly explained: “No portfolio, whether it is debit, credit or prepaid, is a 100 percent profitable. Some products are and some are not. In the case of prepaid products, the incremental costs are high but the margins for issuers are low. Hence, scale is very important for a prepaid card to be successful.”
There is a whole spectrum of options that can be turned into viable products using a prepaid platform. Prepaid can be a complimentary product but it needs a large custom- er base in order to make money. The Indian market is very large and therefore, an issuer cannot just focus on one product or segment.
Surya said: “In order to build scale, we need to find people who can educate the customers. We cannot just assume that if we have a retail reach, then the consumer will buy the product.” Consumer education and distribution is key to bringing in a large number of customers. The value proposition of the product needs to be clearly communicated to the end consumer.
According to Singh: “Unless we build scale, it will not make material sense to issue prepaid cards. The margins in these cards are too low. However, on the positive side, there are enough variations in prepaid and each variation is an opportunity in itself.”
Jayaraman recommended a ‘test and scale’ approach. “Multiple segments can grow at the same time,” he explained. “We need to test and scale these segments. Some will work and some will not. The ones that do work will need further investment and then the focus can be shifted to boosting scale of those segments. Experimenting is the cost of staying in the business.”
The Road Ahead Innovation is the name of the game and prepaid is probably one of the best opportunities in banking where innovation can reach new heights.
Parker explained: “True innovation comes from a deep understanding of your customers – their problems, their needs, expressed or unexpressed. Innovation does not necessarily have to be about bringing in the latest and most expensive technology. It can also be about making things cheap. We need to understand the customers’ perception of innovation and whether they will pay for it.”
Kelly said: “There is a strong future in prepaid in India. But in case of a product like prepaid cards, differentiation can be created through simplicity. We need to customise and work on the needs and requirements of the market we want to tap. The key is not to be hopefully global, but to be mindfully local.”
Prepaid can also be a way to get customers into your portfolio. Once they are in, they can later be upgraded to a credit or debit card if needed. The prepaid platform makes it easier to innovate and load more features and function on one single card. In some ways, it can be called an emerging vehicle for a financial institution.
“Prepaid is a strong complimentary product for debit and credit card,” said Nilankantan. “Look at it as the third leg of the payment tool. It can address certain specific segments. It will co-exist with closed-loop and semi-closed loop systems. India is too large to be addressed by just one type of product.”
According to Singh: “People are already moving away from the culture of money in an envelope as a gift to prepaid gift cards. That is just one segment. The shift towards cashless transactions is already on the go and the future ahead is a strong one.”
Talking about partnerships in the future, Jayaraman said: “Instead of competing with each other, the various stakeholders should stick to their core competencies and then partner with each other to deliver the final product.”
Saxena concluded his presentation by saying: “Co-existence, collaboration and interoperability between – banks and non-banks, and national and regional players – is the key to success. There is also a need for continuous evolution in policy and IT innovation. We need customer transactions, not just acquisitions.”
There is no doubting the fact that prepaid cards are emerging as the growing payment card segment with adoption by consumers, businesses and government agencies across the world. However, there are barriers that the industry participants have to first over- come before they plan their market strategies to tap into the various segments in this market.
The key words for the future are – innovation, partnership and interoperability.
The prepaid platform cannot be fully exploited to its maximum potential unless all stakeholders and participants come together to create solutions that can change the face of the payment industry not just in India but globally.
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