Latin America’s utility and mobile phone sectors present massive growth potential for reloadable prepaid cards according to US-based prepaid specialist NovoPayment in a new study covering 15 countries in the region.
Indicative of the opportunity, NovoPayment forecasts that by 2015 these two sectors of Latin America’s prepaid market could potentially be worth upwards of $160 billion annually.
For the study NovoPayment took into consideration factors such as size of the labour force, poverty rates, wages, banking and other metrics based on its own experience in the region, where some 200,000 consumers are enrolled in its mobile phone and utility prepaid programmes.
The programmes enable payment for services on-demand or via scheduled debits to Maestro-, MasterCard- or Visa-branded prepaid cards.
Providing background to NovoPayment’s optimistic forecast, the company’s CEO Anabel Perez said that its research revealed that unbanked consumers spend on average 10 hours per month queuing to pay bills for utility services, a time wasting problem that prepaid cards would solve.
NovoPayment’s research also revealed that between 80 percent to 90 percent of mobile phone network customers in Latin America are already on prepaid plans. However, NovoPayment noted that these consumers currently rely heavily on single-use, scratch cards.
Headquartered in Miami, Florida, NovoPayment has operations in Venezuela, Peru, Mexico and Colombia where its prepaid programmes includes more than 960,000 active MasterCard Maestro and Visa Electron cards.
This total represents almost a third more active cards than were on the programmes a year ago.
Transaction volumes reported by NovoPayment have also increased notably over the past year rising by 36 percent to 30 million annually while the value of transactions has increased by an even more substantial 88 percent to $620 million.
NovoPayments can lay claim to a number of firsts in Latin America, including the first prepaid general purpose card not requiring a bank account and the first mobile-to-mobile funds transfer platform using short message service.