Indian prepaid card market is seeing high growth; with factors such as a young population and high mobile and internet penetration driving growth. However, there remains a large portion of Indian population who does not have easy access to internet and is more comfortable transacting with their local retailers or grocery sellers rather than online on their own. To tap this large population banks are rethinking their distribution strategy and offering prepaid cards through different channels, apart from their own branch network.

1. Card issuers rethink distribution strategy in India to
reach unbanked population
Analyst View Point Series

2. Table of Contents
Market Context
Key Insights
Market Opportunity
PayNXT360 View

3. Market Context
Indian prepaid card market is seeing high growth; with factors such as a young
population and high mobile and internet penetration driving growth. However, there
remains a large portion of Indian population who does not have easy access to
internet and is more comfortable transacting with their local retailers or grocery sellers
rather than online on their own. To tap this large population banks are rethinking their
distribution strategy and offering prepaid cards through different channels, apart from
their own branch network.

4. Key Insights
In 2015, Axis Bank launched Suvidhaa Prepaid Card, an innovative savings and
remittance tool for the unbanked population of India. The card was launched in
collaboration with Suvidhaa Infoserve Pvt. Ltd, a leading company in the payment and
remittances space. Suvidhaa Infoserve powers local retailers such as mom and pop
stores to make online payments for utility bills, insurance premium, mobile recharge,
travel tickets, and money transfer services on behalf of their digitally excluded
customers. The company has a network of 80,000 franchise outlets across the
country.

5. Key Insights
Axis Bank Suvidhaa Prepaid Card is first of its kind initiative in the Indian banking
Industry as it is completely paperless and leverages the e-KYC (Know Your Customer)
platform for instant customer onboarding, cash deposit and withdrawal. A customer
just needs to have an active mobile number and an Aadhaar number or card. Axis
Bank aims to target people working in the unorganized sector and the immigrant
population of India who find it difficult to access basic banking services for savings or
money transfer to their families.

6. Key Insights
A consumer can get Axis Bank Suvidhaa card issued instantly at any Suvidhaa
Business Correspondent (BC) outlet, through the Aadhaar eKYC platform. This
enables the customer to load funds into the card immediately at the BC outlet. As the
product is a general purpose reloadable card on MasterCard platform, it can be used
at any Point of Sale (POS) terminal that accepts MasterCard payments, ATM or BC
outlet across the country. The prepaid card can also be used to remit money to any
other domestic bank account using Suvidhaa Infoserve’s network.

7. Key Insights
Some features of the Axis Bank Suvidhaa Prepaid Card include:
• Customers can maintain a maximum balance of Rs 50,000 in the card.
• Daily withdrawal limit at ATMs is Rs 20,000.
• Daily withdrawal limit at Suvidhaa BC agent outlets is Rs 50,000.
• Daily POS transaction limit is Rs 20,000.
• The card has multichannel access. It can be used at any ATM, MasterCard enabled
POS, for e-commerce transactions and at Suvidhaa outlets.

8. Market Opportunity
The prepaid card market in Gross Dollar Value terms increased at a CAGR of 39.5%
during 2011-2015. Over the forecast period of 2016 to 2020, the category is expected
to record a CAGR of 29.9%, increasing from US$ 15,219.5 million in 2016 to reach
US$ 43,365.8 million by 2020.

9. PayNXT360 View
For developing countries such as India, where a large portion of the population lives
in rural areas, works in the unorganized sector and continues to be digitally and
financially excluded; products such as Axis Bank Suvidhaa Prepaid Card are an
important tool to bring unbanked population in the formal financial system of the
country. PayNXT360 expects more such partnerships between banks and business
correspondents will occur in the near future to introduce innovative and technology-
driven prepaid cards that help in tapping the unbanked population of India.

10. To Know More
To know more and gain deeper understanding of how
prepaid card industry is shaping up in India, click here.