India Prepaid Cards & Retail Fuel Spend Market Outlook to 2023

Market Overview:

A rapidly evolving market with immense growth potential India Prepaid Cards & Retail Fuel market is being driven bythe rising disposable incomes of the consumers and the varied gift cards offered by companies and retail outlets. The monetary value of the prepaid card is stored on its own, so that such products do not require the opening of a direct deposit or credit account with a bank. Few prepaid cards are not rechargeable, that is, gift cards, so these cards are disposed of off after their virtual sum is completely utilized. On the other hand, rechargeable prepaid cards can be regularly replenished with funds. Prepaid cards can also be bought online as well as from retailers, such as supermarkets, gas stations, office supplies stores, and drug stores.

There are multiple regulatory bodies involved in regulating prepaid cards, including the Reserve Bank of India, the Department of Payment and Settlement Systems, and the Ministry of Finance. This can lead to confusion and delays in launching prepaid card programs.Prepaid cards are not accepted at all merchants particularly in rural or remote areas where digital payment infrastructure is less developed.The India Prepaid Cards Market is with major players in this market are ICICI Bank, HDFC, Rupay, Yes Bank amongst others.

India Prepaid Cards Market Analysis

• The Prepaid Instruments market in India has been experiencing significant growth due to increasing adoption and acceptance of digital payment methods, rising e-commerce transactions, and government initiatives promoting a cashless economy.
• India Prepaid Instruments is majorly driven by the growing e-commerce market which creates a demand for digital payments and a move towards financial inclusion.
• The major recommended strategies for new entrants in the market include offering various incentives, discounts, referral programs and developing user friendly websites or mobile apps.

Key Trends by Market Segment:

By Mode of Payment: The India Prepaid Card & Retail Fuel Market is segmented by mode of payment into Cash, Debit Card, Mobile Wallet & UPI. As of 2022-23, the Cash mode of payment registered the highest share, capturing a whooping 52% of the market. The debit card mode of payment stood second in line with a market share of 23%, followed by mobile wallets & UPI.

By Petrol Fleet: The India Prepaid Instruments & Retail Fuel Market is segmented by petrol fleet into 2W, Private Car, private SUV, Taxis, Taxi SUV & 3W (Goods & Passengers) with 2W capturing the highest share of market, a massive 59, followed by private care (28%), private SUV (8.5%), Taxi (1.9%) & Taxi SUV (1.3%) & 3W (1.2%).

Competitive Landscape:

• HDFC Bank has the highest number of merchant partners up to 2 Mn and lowest churn rate of 5-10% among the major players
• The latest acquisition of Citibank by Axis Bank for its consumer businesses and its non-banking finance arm has helped the bank become the biggest player in the market
• The average revenue per card depends on multiple fees charged by banks like issuance fees, annual fees, amount loading fees among others

Recent Developments:

• Fortum Charge & Drive India Introduces Innovative RuPay Pre-paid Card for EV Charging
• In December 2022, Amara Raja Batteries Limited (ARBL) announced its plans to invest over USD 1,148.89 million over ten years in setting up research and development and a greenfield manufacturing plant for lithium-ion Prepaid Cards production in Telangana's Mahbubnagar district.
• In June 2022, researchers at IIT Madras worked on a new Prepaid Cards technology for electric vehicles. They are developing mechanically rechargeable zinc-air batteries instead of the lithium-ion batteries now used in EVs.

Future Outlook:

• The Prepaid Cards Market is estimated to grow robustly with increasing usage and acceptance of cards at multiple merchant locations
• The online security and protection against cyber threats remain an important consideration for users while purchasing gift cards
• Technologies such as Biometric Authentication, Internet of Things (IoT) and Artificial Intelligence (AI) are expected to drive Industry growth in future