Teen-focused prepaid cards are driving the industry growth in the Middle East and Africa region

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Globally, parents and teens – including Gen Z – are getting attracted to digital payment options such as prepaid cards, and the trends are no different in the Middle East and Africa region. In Europe, where players such as GoHenry and Pixpay are driving the adoption of prepaid cards among teens, several innovative startups have emerged in the Middle East and Africa region over the last few years.

These startups, through their innovative and robust business models, are not only driving the adoption of prepaid cards but are also boosting financial literacy among teenagers in the region. For instance,

• In August 2022, Edfundo, the teen-focused money management app and prepaid card service provider built by teachers with education at the core, went live in the United Arab Emirates and is being used by early adopters. Notably, Edfundo partnered with NymCard’s nCore platform to bring the future of banking to teens in the United Arab Emirates.
• Starting August 2022, the firm has begun opening accounts for the waitlist applicants and is also issuing Visa-powered prepaid cards, which can be used by teens at any of the 100 million plus merchant locations worldwide. The one-of-its-kind money management app, which sits at the intersection of edtech and fintech, allows teenagers to learn, earn, save, and spend from a very early age.

With the growing traction towards teen-focused prepaid cards in the Middle East and Africa region, startups are also raising funding rounds to focus on product development, growth, and strategic partnerships. For instance,

• In August 2022, Zywa, a teen-focused fintech startup in the Middle East and Africa region, announced that the firm had raised US$3 million in a seed funding round, which included participation from Goodwater Capital, Rebel Fund, Zemu VC, and Dubai Future District Fund, among others. Notably, the startup provides teenagers with a prepaid card and mobile app to manage and save money.
• The startup also recently joined Hub71, the global tech ecosystem in Abu Dhabi, thereby gaining access to the capital ecosystem in the country. Targeted toward Gen Z users, the startup is currently operational in the Emirates and Egypt and is further planning to expand its prepaid card offering to Saudi Arabia by early 2023. Notably, the firm is planning to use the capital for product development and create strategic partnerships to accelerate its growth in the region.

Notably, strategic collaborations with global payments giants have been the strategy adopted by several teen-focused prepaid card startups in the Middle East and Africa region. For instance,

• In March 2022, Cashee, another teen banking platform and prepaid card provider in the Middle East and Africa region announced that the firm had joined the Visa Fintech Fast Track program. Notably, the collaboration with Visa is part of the firm's strategy to roll out the digital payment solution focused on teens in the region.
• Through its partnership with Visa, Cashee enables teens to track their earnings, spending, and savings. Notably, the mobile banking app comes with parental controls and oversight, thereby allowing parents to participate in the digital and cashless world along with their teens. The edtech platform, similar to that of Edfundo, promotes and teaches money management to teens at an early age.

With the trend for digital payments gaining momentum and driving adoption among teenagers, PayNXT360 expects more innovative fintech startups to enter the industry from the short to medium-term perspective. These innovative startups, through their strong business models, are projected to keep assisting the growth of the prepaid card industry in the Middle East and Africa region over the next three to four years.

To know more and gain a deeper understanding of the prepaid card market in Africa and Middle East region, click here.