Refugee crisis in EU expected to boost growth of prepaid cards over the short term

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European Union (EU) has taken the initiative of distributing prepaid debit cards to Syrian refugees in Turkey in order to reduce the number of refugees coming to Europe. This initiative has been taken up in association with UN World Food Programme, Turkish Red Crescent and Ankara and will replace "good" consumption system set up by Syrian authorities. Valuation of this plan is about USD 400 million. The cards and first payments will roll out in the beginning of Q4 2016 and benefit of this initiative is likely to be seen by first quarter of 2017. Monthly cash transfers in these cards will help refugees to buy basic amenities related to food, housing, schooling for children and healthcare. Monthly payments will depend on specific family needs and is variable.

Syrian war has been going on for 6 years now and Turkey has been a gateway of escape for the people at it shares 900 km long border with Syria. Turkey currently has the largest refugee shelter in the world with over 3 million people of which 2.7 million are Syrians. It has resulted in increased pressure to support this section of people with basic living amenities. Prepaid card initiative comes in as a part of EU commitment of an approximately USD 3.4 billion support towards Syrian refugees.

Previously, there has been a major stiff between EU and Ankara as EU condemned Turkey’s approach towards human rights when Ankara allegedly dismissed around 10,000 people with suspicion of US based Muslim cleric links. However, Ankara blamed EU for strict travel rules based on visa liberalization on Turkey residents and slow movement of money for aiding refugees. They claimed EU had contracted USD 732 million for the aid but only USD 203 million has effectively reached the people. However, with this recent initiative, cross border relation is expected to improve between EU and Turkey and open up new areas of investment in prepaid card industry for both.

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