Visa is forging alliances to drive its prepaid card market share in the global market

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The global payments market is growing at a rapid rate, with fintech firms and banking organizations looking to boost financial inclusion in their respective markets. Visa and Mastercard are at the forefront of the global payments market evolution, with both players aiming to become the leader when it comes to all things payments. Visa, in its bid to further solidify its market dominance, is forging strategic alliances in the global prepaid card industry. For instance,

• In November 2022, Visa announced that the firm has entered into a strategic partnership with Qatar National Bank to offer FIFA fans an instant digital prepaid card to Visa cardholders. In addition to the launch of prepaid cards, Visa is also piloting biometric payments in Qatar. Notably, consumers will be able to make purchases with their faces at three coffee outlets.

This is the first time facial recognition technology is being used for payments in Qatar. The launch of these solutions is part of the firm's strategy to offer football fans from around the world a seamless and hassle-free payment experience. With thousands of contactless payment terminals installed in Qatar, Visa aims to make the 2022 World Cup to be the most payment-enabled FIFA tournament ever. In the Middle East region, Visa is seeking to aggressively drive its market share through such strategic collaborations. The firm is also looking to tap into the growing corporate prepaid card market. For instance,

• In November 2022, Visa also partnered with Saudi Payments and the Saudi British Bank to launch prepaid cards for corporates and businesses. The prepaid procurement card has been specifically designed for the clients of the Saudi British Bank, thereby allowing them to manage their everyday payments digitally. Through this partnership, Visa is looking to leverage the digital payments market opportunity in the Kingdom of Saudi Arabia.
• In August 2022, Visa also forged an alliance with Pemo, the Emirates-based spend management platform that empowers businesses. Under the partnership, Visa and Pemo are offering physical and digital payment cards that are tailored to the requirements of small and medium-sized businesses. Notably, the payment cards allow businesses to automatically categorize their employee expenses and offer complete visibility on corporate spending.

Visa also forged similar strategic alliances with financial services providers in the United States with the aim to offer early wages to employees in the North American market. For instance,

• In September 2022, Visa announced that the firm had entered into a strategic partnership with DailyPay, a United States-based fintech firm, and The Bancorp Bank. Under the partnership, the two firms launched a general-purpose reloadable prepaid card and mobile app Friday.
• The prepaid card allows employees to access their early pay from their employers at zero cost. The Friday app, on the other hand, ensures that employees can access their earned pay, while also managing and tracking their spending. Furthermore, employees can also use the Visa prepaid card to access cash from fee-free Allpoint ATMs.

The launch of the prepaid card is especially beneficial for employees that are at the lower end of the wage scale. In times of rising interest rates and inflation, early wages can provide consumers with a bit more flexibility in managing their expenses. Consequently, the prepaid card is projected to remain in high demand over the next few quarters, especially in the United States, where inflation is rising at a rapid rate.

All of these strategic alliances are a clear indication that Visa is looking to further boost its market share in the global prepaid card industry. PayNXT360 expects the trend to further continue from the short to medium-term perspective, as Visa continues to innovate with its digital payments capabilities.

Working on a similar strategy line, Mastercard is also forging alliances to increase its market share in the global industry. Notably, in November 2022, Mastercard announced that the firm had entered into a strategic partnership with AstroPay to launch a prepaid card offering for Brazilian consumers, thereby allowing them to make offline and online payments wherever Mastercard is accepted. With the demand for digital payments growing, both Visa and Mastercard are projected to keep forging such alliances over the next few years.

To know more and gain a deeper understanding of the global prepaid card industry, click here.