Pre-paid cards offer USD 93 billion opportunity in India: Visa

According to the survey conducted by global payment technology company Visa, which had respondents in six major cities in India, the current penetration of pre-paid cards at two per cent offers a huge opportunity for Indian banks.

Visa international pre-paid products' Regional Director Neel Nilakantan said, the potential of India in the pre-paid payment card segment is as huge as USD 93-billion per annum.

The survey said that more than 80 per cent of the respondents like to own pre-paid cards as they enjoy the benefits of cashless transactions and the convenience of carrying such cards instead of money.

Visa's pre-paid card segment including travel cards, pay-roll cards and gift cards are a huge success globally and the company is hoping to replicate the same in India though this sector is at a nascent stage here, Nilakantan said.

Close to 1,000 companies in India are using Visa pre-paid cards for paying salaries which can be reloaded. The company has also tied-up with state-run insurer LIC for disbursing annuity benefits to customers.

The consumers can use these cards without a bank account and withdraw money from ATMs or swipe at Point of Sales (PoS).

Axis Bank has achieved an USD 1-billion in total volume on Visa Travel pre-paid cards, Nilakantan said.

Citing the increasing penetration of pre-paid travel cards, he said that over 40 per cent of business travellers in India use pre-paid cards to pay for business expenses.

With customised variations that are tailored to the customers' behaviour or seasonality, gift cards is another area where Visa expects huge growth. These are non-reloadable cards with a maximum cash value of Rs 5,000 for gifting.

Visa Country Head Uttam Nayak said the company is working with authorities to shape up the regulations for pre-paid cards in India.

There are stringent regulations for using them at malls or retail outlets, or in co-branding, he said.