3 Things Banks Need to Know about the Rapidly Growing Prepaid Contactless Smart Card Market
Welcome to the first post in our series on prepaid cards. In this post, Art Stewart, Global Head of Sales & Marketing, IDEX Biometrics, talks about the rapidly growing prepaid contactless smart card market and what banks need to know about it.
The prepaid card market is growing rapidly, and expansion looks set to continue. Globally, this market is already worth over $2 trillion, and experts calculate that its value will reach almost $18.5 trillion by 2030 . With an impressive CAGR of 22.5%, it’s time for more banks and financial institutions to recognize the power of prepaid.
How Prepaid Cards are currently used?
Prepaid cards are often a new customer’s first foray into financial services, and offer a convenient, accessible means of making transactions both online and in a growing number of retail outlets. The cards are not linked to a bank account, enabling customers to control their expenditure without credit checks or other barriers. As the push towards a cashless society continues, the prepaid card ensures those without traditional banking services are not excluded. Prepaid cards work with both open and closed loop networks, making them a versatile option for everyone.
The prepaid card is also opening the door to exciting new innovations, with the Fintech sector increasingly opting for prepaid as their chosen solution.
Things To Know about Prepaid:
1. The First Touchpoint
In a competitive world, banks need to recognize opportunities to attract new customers, and the prepaid contactless smart card serves this purpose well. From parents wanting to teach their children about money, to the many people currently living without traditional banking, prepaid cards offer an excellent means of introduction. Similarly, it’s estimated that some 2 billion people are not accessing digital banking services, and by offering a simple first touchpoint, banks can improve these figures. Giving these customers a positive, straightforward experience through a prepaid card service allows banks to build vital brand loyalty.
2. The Bridge To A Cashless Society
The move towards a cashless society has accelerated since the Covid pandemic. The need to optimize hygienic, contactless payment methods has made cards essential. Subsequently, the prepaid contactless smart card market has exploded, as it allows those who would not qualify for bank linked cards to continue to participate in society. With the increasing emphasis on environmental issues, going cashless also considerably reduces carbon emissions, making prepaid cards the ideal bridge to the future of money.
3. A Contactless Smart Card Attracts a Young Demographic
From students needing to control their expenses, to those lucky enough to be going traveling, statistics show that prepay is particularly popular with young people. It’s easy to see why, thanks to the security, convenience and accessibility of this easy-to-use payment method. With nearly 2 billion young people in the world today , that’s a healthy demographic that banks cannot overlook, and offering prepay options can draw in lifelong customers.
A Growth Market To Watch
While there are a number of security and trust issues (to be addressed in our next blog), the prepaid card is a growth market that banks should be taking seriously. With impressive advantages to be gained, now is the time to introduce prepaid smart cards and reap the rewards.