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Australian prepaid card market to reach USD 14 billion by 2020; travel cards expected to post strong growth

Prepaid cards are increasingly being use by Australian consumers to meet different requirements such as for international travel, gifting, transport, or for purchasing everyday items. As entry of new players heats up the competition in the market, companies are relying on introducing innovative products and services to differentiate their offerings and capture market share.

The growth potential of Australian prepaid card market remains high. The market in terms of Gross Dollar Value (GDV) is expected to record a CAGR of 14.5% from 2016 to 2020, to reach USD 14.1 billion by 2020.

Over the last five years, Australian travellers have shown a marked preference towards use of prepaid travel cards. To capitalize on this trend, recent years have seen introduction of travel prepaid cards that are specifically designed to target a niche within the segment. For instance, travel prepaid cards have been launched that are connected to an airline’s frequent flyer program. These include, Qantas Cash and Virgin Global Wallet, which were launched by Qantas and Virgin Airlines, respectively to leverage on their strong position in the travel and tourism industry. These prepaid cards are promoted as convenient tools that enable cardholders to load multiple foreign currency balances onto the card and allow accrual of frequent flyer points.

Public sector firms are focusing on overseas partnerships to drive revenue growth through prepaid travel cards. Government-owned entity Australia Post collaborated with China Union Pay (CUP), to sell CUP’s multi-currency prepaid travel payment cards in Australia. Introduced in 2015, Australia Post’s new travel card, Load&Go China allows Australians to purchase and pre-load their travel cards with both Chinese Yuan and Australia Dollars. The card can be used anywhere on the global UnionPay acceptance network and for making online payments.

The Australian gift card market has become more sophisticated. While gift cards are predominantly marketed as an alternative to giving presents on special occasions, they are seeing increasing use by businesses as part of their broader business strategy, for promotions and to achieve other marketing objectives.

Overall, we expect a number of initiatives across prepaid card segment over the next five years, driving innovation and growth. Key focus areas include integration of prepaid cards with mobile application, use of prepaid cards for micro financing, and increased focus on targeting teens and millennials.

Want to gain deeper understanding of prepaid card dynamics in Australia?

Announcing the ‘Prepaid Cards Market Intelligence’ series – “Australia Prepaid Cards Business and Investment Opportunities – Market Size and Forecast (2011-2020), Targeting Strategies, Analysis of Business Trends, Consumer Attitude & Behaviour, Retail Spend, Market Risk, Competitive Landscape and Market Innovation”.

This report from PayNXT360 provides a strategic analysis of prepaid (pay before) cards, offering a wealth of insights to help companies understand this growing but quickly changing market:

Market dynamics: Provides a comprehensive view on size and structure, industry dynamics, market trends, consumer attitude and behaviour, and competitive landscape in prepaid card industry.
Open loop and closed loop: Provides market estimates and forecasts to assess opportunities in open loop and closed loop prepaid market segments. Details four essential KPIs – number of cards in circulation, numbers transactions, load value, and value of transactions.
Prepaid card categories: Details market opportunities across 11 market segments in prepaid cards for the period 2011-2020 and identifies potential risks, and consumer adoption. Card categories include – Gift Cards, Teen and Campus Cards, General Purpose Reloadable Cards, Remittance Cards, Travel Cards, Business Expense Cards, Payroll Cards, Corporate Incentive Cards, Consumer Incentives, Government Benefit & Other Program Cards, Healthcare & Insurance Cards.
Benchmarking and risk index: Benchmarks the prepaid card industry in the country with key global markets along with a risk assessment through PayNXT360’s proprietary Prepaid Cards Industry Risk Index (PCIRI).
Consumer attitude and behaviour: Drawing from proprietary survey results, this report identifies and interprets key prepaid KPIs, including spend by age, gender, and income level. In addition, it provides an overview of how consumers are currently using prepaid cards across five key categories – travel, bill payment, retail spend, cash withdrawal, and P2P transfers. It also provides a breakdown by transaction size.
Retail spend: Breaks down retail spend across 11 categories to provide detailed insights on consumer behaviour and changing dynamics of prepaid card spend.
Gift cards: Drawing from proprietary survey results, this report provides in-depth analysis of opportunities in both open loop and closed loop prepaid gift card categories. Assesses consumer behaviour by type of consumer (retail and corporate), gifting occasion, card type (paper, plastic, digital), and market share by retail categories.
Innovation and market strategies: Explores prepaid card strategies, including innovations across categories, competitive positioning, and new product launches.