Social benefit prepaid cards expected to record CAGR of 13.7% during 2017-2021; government to continue cashless welfare cards in Ceduna and Kununurra

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The Government of Australia has announced to continue its cashless welfare cards on an ongoing basis in Ceduna and Kununurra towns in the country, following a successful year-long pilot study.

As part of the study, about 80% of the recipients’ welfare was provided on a cashless debit card to restrict purchase of alcohol or gambling activities, while the remaining 20% was credited to participants' bank accounts to allow cash withdraws. Interestingly, the government found that the welfare cards were successful in reducing the alcohol, gambling and drug abuse.

Australian Human Services Minister Alan Tudge said that the welfare cards system will be reviewed half-yearly and did not assured on roll out of cards in other towns of the country.  Mr. Tudge also said that the study included “a couple of examples of suspected prostitution and merchants overcharging for a product or services and then refunding the difference in cash.”

The pilot study, commissioned by the Australian government and conducted by Orima Research, found that on an average a quarter of people using the card drank less, while just under a third of gamblers restrained their habit. The trial also revealed reduction of overall crime in Ceduna town and no proof of reduced crime in Kununurra town.

Further, the Australian government said that it is monitoring the welfare card system and finding solutions for couple of loopholes such as suspected prostitution, overcharging for a product or services by merchants and instances of refunding in cash.

PayNXT360 expects Australian social benefit prepaid card market to reach US$ 1.4 billion by 2021.

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