MasterCard reported a 40 percent year-on-year growth for its prepaid business across Asia/Pacific, Middle East and Africa (APMEA) for 2013.
According to the global payment provider, the growth is expected to continue this year and will be fueled by the growing need for financial inclusion in emerging markets as well as the increasing cross border and e-commerce transactions.
In an effort to enable the citizens of emerging markets to access financial services, MasterCard has rolled out several innovations revolving around prepaid cards. For instance, the company launched a mobile companion prepaid card in India that connects the existing mobile wallets of Beam Money's customers to MasterCard's acceptance and electronic payments. By doing so, customers can now carry out e-commerce transactions such as making fund transfers and booking movie tickets online.
Another driver of prepaid growth is the surge in cross border transactions, especially by China consumers. "We are seeing the biggest potential for prepaid growth come out of China given that it had the highest number of outbound tourists and amount of overseas spending in the world last year," said Jason Tymms, MasterCard's Head of Prepaid for APMEA.
According to MasterCard, China became the largest outbound tourism market in 2012 with 83 million overseas trips. This number grew to 97 million last year. It is thus expected that the number will top the 100 million mark this year. As this group of consumers has a need for electronic acceptance when abroad, MasterCard rolled out the MasterCard Cash Passport, a multi-currency travel prepaid card."[The card not only] takes away the hassle and risk of carrying a lot of cash [but also] enables cardholders to lock in exchange rate at the time of loading to avoid fluctuations," said Tymms.
E-commerce is also proving a key driver for prepaid growth. MasterCard's Online Shopping Survey found that Southeast Asian markets are showing great potential for e-commerce, with respondents in Vietnam (91.4 percent) and Thailand (84.2 percent) claiming their intention to make an online purchase in the next six months.