Dublin, May 31, 2024 (GLOBE NEWSWIRE) -- The "Latin America Prepaid Card and Digital Wallet Business and Investment Opportunities Databook - Market Size and Forecast, Consumer Attitude & Behaviour, Retail Spend - Q1 2024 Update" report has been added to ResearchAndMarkets.com's offering.
The prepaid card market in Latin America increased at a CAGR of 8.8% during 2019-2023. Over the forecast period of 2024 to 2028, the market is expected to record a CAGR of 10.7%, increasing from US$62.96 billion in 2023 to reach US$109.38 billion by 2028.
The thriving fintech ecosystem, coupled with the rising investment in digital payments infrastructure, is aiding the growth of the prepaid card market in Latin America. In 2024, prepaid payment instrument providers, including digital wallets and prepaid cards, are expected to accelerate their regional expansion as they seek to tap into the growing demand for such solutions.
The strategy of regional expansion is also expected to drive the trend of mergers and acquisitions over the medium term in Latin America. The unbanked and underbanked customer demographic continues to present a strong growth opportunity for prepaid payment instrument providers. Overall, the publisher maintains a positive growth outlook for the prepaid card industry over the next three to four years.
Firms are seeking to strengthen their presence through regional expansion in the Latin American market
Across Latin America, the demand for digital wallets and prepaid cards is poised to grow at a rapid rate over the medium term. To tap into the growing demand, fintech firms and digital banks are expanding their regional presence. This trend is projected to gain further momentum in 2024.
Prex, a Uruguay-based fintech firm, is planning to have 5 million users for its virtual wallet over the next two years. As a result, it seeks to strengthen its position in existing markets like Argentina, Peru, and Uruguay, while also expanding in other regional markets like Chile and Paraguay. The firm, as of November 2023, has 2.2 million users in its existing three countries.
Although Chile has a significant portion of the banked population, the availability of diverse financial services products is lacking in the country. This is where Prex is seeking the opportunity to become the preferred digital payment solution provider in Chile. In Paraguay, on the other hand, low banking penetration offers a strong growth opportunity. Furthermore, the adoption of virtual wallets is also growing in Paraguay.
Traditional banking institutions are vying for digital customers through the fintech route in Latin America
The changes in financial regulations are driving the competitive landscape in the fast-growing fintech sector in Chile. Itau, the largest bank in Latin America, is set to enter the neobank market.
Itau, which has a strong presence in the banking sector in Chile, is also targeting digital customers in Chile through its neo-banking arm Iti. The new venture will facilitate payments both in-person and online. The foray into the fintech sector comes at a time when competition is growing rapidly in the segment.
Neo-banks like Nubank, for instance, have gained strong popularity across Latin America. These players have attracted millions of customers through their innovative products, including digital wallets, at a very low cost. With increasing competition, incumbent banks have revamped their products.
The move comes on the back of the changing fintech landscape in Chile. The implementation of the fintech law in 2023, which introduced concepts like Open Finance, is projected to further support the growth of the prepaid card industry in Chile over the medium term.
Walmart opposes the high fees proposed by Transbank for debit cards in the Chilean market
Tenpo has launched a strong offensive against Walmart, accusing the retailer of refusing to accept prepaid cards in its stores and online platform. The digital platform, having over 2.3 million users, argues that Walmart's actions are unjustified and harm the payment industry in Chile.
According to a report published on Contxto, there are more than 7 million prepaid cards in circulation, representing 15% of all active cards in Chile, as of December 2023. Furthermore, the 10 issuers of prepaid cards have experienced an average annual transaction growth of 233%. This shows the growing popularity of prepaid cards in the Chilean market. Currently, Walmart and Falabella.com are the only major retailers not accepting this type of card.
Walmart has expressed dissatisfaction with the fees proposed by Transbank for debit card transactions, believing them to be too high. According to Monica Aravena, CFO of Walmart Chile, cash transactions only cost the chain one-third of what debit card transactions do. The firm states that it will only consider accepting prepaid cards if they are allowed to negotiate commissions that fit its strategy of offering low prices, particularly for lower-income customers.
This report provides a detailed data centric analysis of prepaid payment instruments, covering spend through prepaid cards and digital wallets across retail and corporate consumer segments. In addition, it provides a snapshot of consumer behaviour and retail spend dynamics in Latin America.
With over 100 KPIs at country level, this report provides comprehensive understanding of prepaid card and digital wallet card market dynamics.
Report Scope
- Market dynamics: Provides a comprehensive view on size and structure, industry dynamics, market trends, consumer attitude and behaviour, and competitive landscape in prepaid card and digital wallet industry.
- Digital wallet segments: Provides value, volume and average value per transaction across 5 key spend categories in digital wallet. This includes retail, travel, entertainment and gaming, restaurant, and recharge and bill payment.
- Open loop and closed loop prepaid cards: market estimates and forecasts to assess opportunities 12 open loop and closed loop prepaid market segments. Details four essential KPIs - number of cards in circulation, number of transactions, load value, and value of transactions.
- Virtual Prepaid Cards: Provides transaction value analysis across 12 key prepaid card catergories for Virtual Prepaid Cards.
- Detailed Market Share Analysis by Key Players in the Prepaid Card Market.
- Consumer attitude and behaviour: Drawing from proprietary survey results, this report identifies and interprets key prepaid KPIs, including spend by age, gender, and income level.
- Retail spend: Breaks down retail spend across 11 categories to provide detailed insights on consumer behaviour and changing dynamics of prepaid card spend.
Key Topics Covered
- Prepaid Payment Instrument Market Size and Forecast
- Digital Wallet Market Size and Forecast
- Digital Wallet Market Size and Forecast by Key Segments
- Digital Wallet Spend by Key Retail Categories
- Prepaid Card Industry Market Attractiveness
- Market Share Analysis by Functional Attributes - Open Loop vs. Closed Loop
- Open Loop Prepaid Card Future Growth Dynamics
- Closed Loop Prepaid Card Future Growth Dynamics
- Prepaid Card Market Share by Key Players
- Prepaid Card Consumer Usage Trends
- Prepaid Card Spend by Key Retail Categories
- General Purpose Prepaid Card Market Size and Forecast
- Gift Card Market Size and Forecast
- Gift Card Market Size and Forecast by Functional Attribute
- Gift Card Market Size and Forecast by Consumer Segments
- Gift Card Market Share Analysis by Retail Categories
- Gift Card Market Share Analysis by Gifting Occasion
- Gift Card Market Share Analysis by Purchase Location
- Entertainment and Gaming Prepaid Card Market Size and Forecast
- Teen and Campus Prepaid Card Market Size and Forecast
- Teen and Campus Prepaid Card Market Size and Forecast by Functional Attribute
- Business and Administrative Expense Prepaid Card Market Size and Forecast
- Business and Administrative Expense Prepaid Card Market Size and Forecast by Consumer Segments
- Payroll Prepaid Card Market Size and Forecast
- Payroll Prepaid Card Market Size and Forecast by Consumer Segments
- Meal Prepaid Card Market Size and Forecast
- Meal Prepaid Card Market Size and Forecast by Consumer Segments
- Travel Forex Prepaid Card Market Size and Forecast
- Travel Forex Prepaid Card Market Size and Forecast by Consumer Segments
- Transit and Tolls Prepaid Card Market Size and Forecast
- Healthcare and Wellness Prepaid Card Market Size and Forecast
- Social Security and Other Government Benefit Programs Prepaid Card Market Size and Forecast
- Fuel Prepaid Cards Market Size and Forecast
- Utilities, and Other Prepaid Cards Market Size and Forecast
- Virtual Prepaid Card Industry Market Attractiveness
- Virtual Prepaid Card Market Size and Future Growth Dynamics by Key Categories
For more information about this report visit https://www.researchandmarkets.com/r/nrvazc
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