NovoPayment, Inc., Latin America’s leading prepaid card service provider and program manager, announced today at the 3rd Annual Underbanked Financial Services Forum its regional forecasts for general purpose spending cards – the classification given to branded payment cards similar in function to debit cards, but that require no underlying banking account.
The company, which pioneered the payment category in the region, estimates a potential market of more than 300 million unbanked Latin Americans with a purchasing power of more than US$200 billion per year using prepaid spending cards by 2015. Such a development would provide access to POS, ATM, online transactions and mobile payments to a public that today relies almost exclusively on cash.
“Our study revealed a significant market with the income, access to infrastructure and consumption behavior to be viable prepaid general purpose card users,” said NovoPayment founder and CEO Anabel Perez whose company’s cards are issued under the MasterCard, Maestro, Visa and Visa Electron acceptance brands. “Approximately 57% of the population has the need, the capacity, the means, and we believe the necessary economic and social incentives to warrant modern payment tools,” she added. “Prepaid general purpose cards have proved to be well suited for providing these services in a sustainable way.”
The forecast which covers 15 countries – Argentina, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Guatemala, Ecuador, El Salvador, Honduras, Nicaragua, Panama, Peru, Mexico and Venezuela – is based on the measurement of such factors as size of labor force, poverty rates, wages, banking and mobile penetration, as well other metrics based on the company’s own experience in the field.
“The combination of sustained economic growth, increasing intra-regional commerce and the prospect of major trade pacts present positive conditions for the growth of general purpose prepaid cards,” Perez said. “These events merit ongoing analysis and could push figures higher over time,” she added.
The forecast is part of a larger study quantifying opportunities in Latin America for prepaid spending cards including the areas of wireless services, electricity, food vouchers and other key categories. In addition, the company also reaffirmed its objective of expanding to new Latin American markets and said it expected to make an announcement to that respect in the near future.