Thursday, September 19, 2013
Conventional wisdom holds that most of the growth in the global prepaid card market is coming from developing markets. But in a Sept. 11, 2013, conference call with financial analysts, a MasterCard Worldwide executive said a big expansion in prepaid usage is occurring in Europe.
Ann Cairns, President of International Markets at MasterCard, said, by way of a Seeking Alpha transcript of the conference call, that prepaid is "really taking off across Europe," and especially in Italy and the United Kingdom. Cairns cited a study of open-loop prepaid cards that estimated the global market for prepaid will reach $822 billion by 2017, and that about 20 percent of that growth will take place in Europe alone, where 50 percent of that number will be concentrated in the U.K. and Italy.
Cairns said 10 million MasterCard-branded prepaid cards are in circulation in Italy, with 1 million of that total to facilitate government benefit payments, distributed via the Italian post office system. "[T]his is a big benefits program just again to say look it's not just governments in emerging markets that we're dealing with, and it's not just emerging markets that need prepaid," she stated.
MasterCard is also expanding its prepaid footprint in Italy via Rome-based petroleum and energy distributor Eni SPA. The company operates gas stations and cafes across Italy and is in the process of integrating contactless payments in those locations, according to Cairns. She said MasterCard is working with Eni to implement a loyalty card solution.
The bank distributed general purpose reloadable (GPR) card market in Italy is another sector MasterCard is focusing on. Cairns said these GPR cards are being used as alternative bank accounts and to transfer money.
Cairns added similar MasterCard-branded GPR cards are becoming more popular in Britain, where the prepaid market is growing at an annual rate of around 40 percent. She noted that partnerships between the card brand and prepaid mobile telecommunications firm Orange (in 2011) and more recently with mobile device manufacturer Samsung Electronics Co. Ltd. will "completely revolutionize the space," Cairns said.
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