More than just a “pay-before” card, the prepaid ecosystem is fast becoming the platform of choice for fintechs and enterprises looking to innovate their payment solutions.
Growth of fintech landscape in Australia and globally have seen an emergence of new players in the Buy-Now-Pay-Later space, as well as SME and consumer lending. Thanks to its flexible, easy-access infrastructure, prepaid has been leveraged by many fintechs to produce innovative products that are now disrupting the traditional financial landscape that’s largely been dominated by the big four banks.
Accessibility, convenience, security and the Open Banking era has contributed to the immense growth and innovation within the prepaid ecosystem. The latest figures in January 2021 shows that there are $954 million have been loaded to 11.3 million prepaid cards issued. Consumers, small businesses, corporations and government agencies are all leveraging prepaid cards to streamline personal and business expenses, corporate disbursements and incentives.
Why fintechs and enterprises are leveraging prepaid cards:
- A more accessible and affordable alternative to banking services.
- Flexible and scalable platform provides a large number of applications and B2B or B2C user propositions e.g. rewards program, emergency relief payments, insurance payout, travel etc.
- Widely accepted form of payment i.e. wherever Visa is accepted.
- Supports multi-wallet, multi-currency and multi-channel adoption to deliver bespoke, highly personalised customer experiences.
Innovative prepaid card use cases
Here are some real-life examples of how prepaid cards are transforming various industries:
- Delivery drivers can receive funds instantly on their drivers’ prepaid cards, which can be used to fill up petrol, pay for tolls and to receive their earnings.
- Corporate employees can use business prepaid cards to pay for travel expenses and petty cash, which is linked to a card management platform that consolidates and tracks all business expenses.
- A sole trader is able to apply and use a single prepaid card which splits his personal and business expenses under separate accounts.
- Emergency relief recipients can instantly receive funds via a virtual card sent to their phone or email. Customisable controls can be set up on these cards so that the relief recipients are only able to use funds as intended e.g. not for gambling or alcohol.
- Online shoppers can apply for a prepaid card that allow them to buy now pay later for goods and services at every checkout through their existing BNPL provider.
- Corporate and consumers can purchase digital gift cards that can be sent to employees or friends, which is easily redeemable and manageable via a mobile app.
Whether it is physical or virtual cards, single load or reloadable, it’s safe to say that prepaid solutions will continue to be a driving force behind fintech innovation. By the same token, we anticipate that prepaid cards will also become a more mainstream form of payment as consumers and businesses embrace its many unique benefits and use cases.