Prepaid transit cards gaining popularity in India; expected to be one of the key growth drivers

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Gross dollar value (GDV) of Indian prepaid card segment reached USD 15.6 billion in 2016 growing at a CAGR of 37.7% is past 5 years. India has been considered as one of the fastest growing prepaid markets worldwide with high adoption rate. This has been the driving force towards usage of prepaid cards in various segments, most popular being transportation. This trend is likely to become popular business expansion segment for prepaid card solution providers in coming years for stable revenue generation and growth.

Prepaid transit cards are gaining importance in Indian market as different initiatives are being taken up by banks and transport services of various states. Recently, Pune Municipal Corporation has announced plans to introduce prepaid MI cards for travelling in Pune Mahanagar Parivahan Mahamandal (PMPML) buses. Additional features of MI card include payments related to property tax, water tax, and parking fees.

Initially card holder needs to pay INR 80 for personalized card along with required documents including Aadhar card. Pune has nearly 1200 PMPML buses and 10 lakh commuters use these buses per day. Approximately 3 lakh commuters have PMPML bus passes as well. PMPML plans to scrap 350 buses and 1550 new buses with swipe machine facility will be introduced in coming days. Company officials are planning to convert all bus passes to MI cards in a span of next 6 months. Commuters need to swipe the card once they board and swipe it again before getting down and the fare will be calculated and deducted accordingly. Since the same card can be used for tax payments, plans are to introduce swipe machines at property tax collection centers also for payments.

Previously in 2016, similar initiatives related to prepaid transit cards were taken. India’s third largest lender Axis Bank partnered with Bengaluru Metropolitan Transport Corporation (BMTC) to launch Axis Bank BMTC Smart Card in September 2016. It became India’s first transit prepaid card with integrated single wallet supporting EMV wallet and transit functions. This initiative was a part of country’s Common Mobility Card vision. The cards could be loaded at BMTC issuance counters such as pass counters and Traffic and Transit Management Centres for balances lower than INR 10,000. For balances higher than INR 10,000 full KYC documentation is required. Also, Kerala State Road Transport Corporation (KSRTC) announced its plans to introduce prepaid travel cards offering unlimited travel during a month on December 2016. Plans are to introduce four categories of cards based on amount. Prepaid cards worth INR 1000 will allow commuters to travel limited stop and ordinary buses in a particular district. INR 1500 value cards will allow traveling limited stop and ordinary services anywhere in the state. INR 3000 prepaid cards will allow traveling in fast passenger and superfast buses. There will be a premium card worth INR 5000 valuation as well that will provide eligibility to travel in any bus except Volvo and Scania buses of the KSRTC. The functionality of these prepaid cards will be similar to ATM cards and can be recharged after certain time period.

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