Banks as well as financial services companies are shifting their focus from credit cards to prepaid cards.
Major private banks of the country like Axis Bank Ltd, HDFC Bank Ltd, ICICI Bank Ltd and Yes Bank Ltd have already started offering prepaid cards. These cards come in several varieties like one-time gift cards, foreign currency travel cards, meal cards, corporate incentive cards and government disbursement cards.
Canara Bank and Standard Chartered Bank have plans to enter into this segment in this financial year.
MasterCard and Visa, two of the largest electronic payment service providers say that their growth prospects in future lies with these prepaid cards.
Laura Kelly, Grouphead at MasterCard Worldwide says that the Indian prepaid card market is expected to see a 40% year on year growth in the year 2017 as compared to year 2009.
About "$34 billion will come from corporate travel, incentives, meal vouchers and payrolls, while $23 billion will come from consumer reloadable and online cards. Only $2 billion will come from public benefit, pension and social security programmes," Kelly said.
According to HDFC Bank, there has been a rapid growth in prepaid cards. "We offer all types of cards-payroll, travel, food and gift-and we have seen 75-80% growth in the last year," said Navtej Singh, head (direct payment products) at HDFC Bank.
Canara Bank wants to enter this segment with a gift card, a travel card and a corporate card. "The gift card will be launched very soon with a maximum unreloadable limit of `5,000," said Nagendra H.V., manager at the card division of Canara Bank.