The most significant potential market for prepaid across the globe is the un(der)banked. A good portion of this market are immigrants who often rely on MTOs (Money Transfer Operators) like Western Union and MoneyGram to send money home. These traditional MTOs are still very expensive, despite the pressure of newcomers like WorldRemit and TransferWise. A substantial opportunity exists to utilize geographically recognized brands to launch remittance solutions and to save immigrants millions in fees by offering a prepaid account that with remittance capabilities. Funds can either be sent to a local bank account of the immigrants home country, picked up at a cash remittance location, or funds can be loaded onto a “companion card” tied to the originator’s prepaid account.
A recent study by global consulting firm BearingPoint and Visa posited a $1.1 trillion market of people who either do not use banks or do not have the credit to hold accounts. The study estimated that underbanked consumers spend between $300- $400 per year in bill payment fees, including check cashing, money orders and other fees. The market for prepaid cards includes not only underbanked consumers but also the teens and young adults who are large users of similar products such as prepaid wireless phones. The Yankee Group reports that as many as 65% of prepaid debit card users are under 35 years old.
Concerning remittance volume, India retains its top spot in 2018, with remittances expected to total $65 billion this year, followed by China ($63 billion), the Philippines ($33 billion), Mexico (a record $31 billion), and Nigeria (($22 billion). In keeping with an improving global economy, remittances to low- and middle-income countries are expected to grow by 3.5 percent in 2018, to $466 billion. Global remittances will grow by 3.4 percent to $616 billion in 2018.
Copyright © 2019 Tern Commerce. All right reserved.