Prepaid cards in Latin America expected to grow at a CAGR of over 21.4%

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Prepaid card industry in the Latin American region has lagged behind growth markets in Asia Pacific except a few select pockets of growth. However, the region has been posting steady growth in recent years. Brazil is one of the major prepaid card markets in Latin America, driven by adoption across government, business, and retail segment. Majority people prefer cash transaction to any other form of payment. There are financial companies who are providing various types of prepaid cards that can be used for purchases as well as accounts for unbanked that constitutes nearly half of the population in this region.

Consumers in Latin American region prefer debit and credit card transactions to be more secure and reliable. Awareness towards various forms of prepaid cards is still to be harnessed. It can be anticipated that with right service line and consumer knowledge this segment will gain momentum in coming years.

Around 55 million population of Brazil is unbanked and prepaid cards form alternative financial service solution for this segment. Card payment system is quite popular in Brazil since 2013 after regulations implemented by Brazil’s Central Bank. Employers in Brazil are providing incentives through prepaid cards and gift cards that are now popular in the market which is fueling growth.

The prepaid card market in Brazil in Gross Dollar Value terms increased at a CAGR of 30.8% during 2011-2015. Over the forecast period of 2016 to 2020, the category is expected to record a CAGR of 20.5%, increasing from US$ 62,053.8 million in 2016 to reach US$ 130,698.2 million by 2020.

In Mexico, transportation cards are the most common form of prepaid cards available in the market. Prepaid cards have been widely accepted form of public transport payment across the country. In recent times, other service payments related to transportation have also been added to the system such as parking and toll roads. Security continues to remain a concern towards usage of prepaid cards. The country has 70% unbanked population. Hence, new initiatives are being taken towards introducing alternative payment methods. Amazon Mexico introduced gift cards in specific denominations sold through Oxxo, Chedraui and Gamer stores. These can be used to make payments for online purchases.

The prepaid card market in Mexico in Gross Dollar Value terms increased at a CAGR of 31.5% during 2011-2015. Over the forecast period of 2016 to 2020, the category is expected to record a CAGR of 21.8%, increasing from US$ 11,202.1 million in 2016 to reach US$ 24,684.9 million by 2020.

In Argentina, prepaid card segment is at a nascent stage though the market is growing steadily across categories. Travel prepaid cards have started to gain popularity. Uber Technologies Inc. collaborated with bitcoin startup Xapoearlier this year to launch prepaid debit card that is attached to a bitcoin wallet. Through this approach Uber plans for a business expansion in Argentina and other Latin American markets.

The prepaid card market in Argentina in Gross Dollar Value terms increased at a CAGR of 35.5% during 2011-2015. Over the forecast period of 2016 to 2020, the category is expected to record a CAGR of 24.8%, increasing from US$ 2,400.4 million in 2016 to reach US$ 5,813.9 million by 2020.

To know more and gain deeper understanding of prepaid card industry in Brazil, click here