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« Underdeveloped markets | Main | Ten more years of technology »

Prepaid in Europe

By davebirch posted May 14 2007 at 12:42 PM

[Dave Birch] I gave a talk about prepaid cards recently and it was very clear from the questions I got afterwards that they are central to many organisations strategies.  I wasn't surprised when MasterCard Europe released some new figures estimating that spending on prepaid payment "cards" (my quotes, because by 2010 some of the prepaid transactions will via phones, keyfobs, watches and goodness knows what else) will reach $164 billion in three year's time.  The research they commissioned shows that the UK will be the biggest single market for prepaid cards and the Russia and Poland will have the highest prepaid penetration (at 13-14%, compared to 8% for Germany).  One of the reasons for the bullish prediction is the increasing use of prepaid cards by governments to pay benefits.  Note that for comparison, the US market is predicted to be $296 billion, Japan $59 billion and the UK $34 billion at the same time (which means it will be the fourth largest market).

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These figures for Europe are much, much bigger than last year's Payment Systems Europe figures but perhaps they're counting differently.  Anyway, the detailed predictions aren't the point.  The point is that prepaid cards are going to be a substantial market in a short time. While the UK and other European markets may well be developing differently from the US market (with its roots in the gift market) -- look at, for example, the Italian market that we've discussed before -- the growth curve looks as if it will be similar.  I think one difference might be that the European markets will move more quickly to open prepaid (which needs to work much better than it does right now) rather than spend time in a more closed (gift and retailer dominated) mode before open begins to grow.

These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]


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