India’s Prepaid Market Still a Long Way to Go, But the Potential is Tremendous

by Terry X Xie 0

By Terry Xie, Director, Mercator’s InternationalAdvisory Service

A survey carried out by Visa in India shows that currentpenetration of prepaid cards is just two percent. But the surveyalso shows that the potential is tremendous given the good consumerawareness and reception of prepaid cards:

“While current prepaidpayment card ownership in India was low at only two percent, fourout of 10 respondents were aware of the product, and eight out of10 said that they would like to own such a product in the nearfuture.”

Visa estimates the prepaid potential in India at US$93billion a year, but it didn’t elaborate on the assumptions. Thenumber appears a bit high as the total credit and debit cardpayments were just US$20 billion from April 2009 to March 2010according to the central bank’s data.

Mercator’s estimate was $15.6 billion a year across sixmajor prepaid categories in India. Mercator’s study is based on2008 data on population, GDP, urbanization levels, governmentbudgets, consumer spending, retail sales, the payment marketreadiness, and other economic and social indicators in India usingthe 2008 U.S. market as a benchmark.

Read referenced article:BusinessStandard: Prepaid card potential of $93 bn per year:Study