You are here: VRL Financial News - Home » Cards & Payments » Cards International » Reports » The Indian Prepaid Market

The Indian Prepaid Card Market

Published: September 2010

The Indian Prepaid Card MarketThe number of Indian prepaid cards in issue is incredibly small - only 2% of the total targeted population.

This reports incorporates a detailed breakdown of the socio-economic factors expected to drive the growth of Indian credit and debit cards, and gives you the the information you need to successfully enter this growing market.

Buy today for only £1297 + p&p for a hard copy or £2197 + vat for a 2 user licence.


Interested in this report but require a different territory or focus? Contact Jeannie today to discuss a customised version. Email on or call +44 (0)20 7563 5605

Industry observers have found that there is a strong correlation between the the growth of the debit and prepaid market in India, and that of the mobile phone market, showing that this region presents phenomenal opportunities.

A recent estimate by Visa Inc puts the target population for credit and debit cards in India at 200 million. Yet there are about 400 million Indian people who don't have a bank account. It is this combined 600 million which should be viewed as the true target market for prepaid cards.

Providing intelligent insight into the Indian prepaid and debit card industry, this VRL report gives your business the expertise to take advantage of this emerging market.

Read this report to:

  • Follow the correlation between the potential growth of the Indian prepaid market and the successful growth of the Indian mobile phone industry
  • Analyse market share for businesses currently providing the cashless option in India
  • Explore the socio-economic factors contributing to the current and projected Indian prepaid and debit card market
  • Study the facts and figures for the payment infrastructure of Indian banking
  • Investigate the business opportunities Indian prepaid and debit cards present

The target market

The number of Indian prepaid cards in issue is almost embarrassingly small. According to the Prepaid International Forum there are around 4 million prepaid cards in India.  This comprises a mere 2% of total debit cards (there are 185 million debit cards in India), but the targeted population for prepaid cards by any measure has to be considerably larger. A recent estimate by Visa Inc puts the target population for credit and debit cards in India at 200 million. Yet there are about 400 million adult Indians who don't have a bank account. It is this combined 600 million which should be viewed as the true target market for prepaid cards.

The existing market for Indian debit/prepaid cards

Unsurprisingly the Indian card market is fast growing, and the pace is accelerating. Industry observers point to strong similarities between the growth of the Indian mobile phone market, and that for Debit and Prepaid cards. The Compound Annual Growth Rate of mobile phone take up in India during 2006-2010 was 52%. By comparison the number of debit cards issued rose from 18.1 million in 2003 to 184.79 million in 2009, +47% CAGR.  The transaction value has shown healthy growth of 32% during the period. In 2009-10 fiscal, payments made by debit cards in India stood at US$ 5.87 billion (Rs 264.18 billion) a rise of 44% compared on 2008-09.

Payroll cards dominate the prepaid cards market with a 34% share, with travel cards at 24%, and multipurpose cards with a 22% market share. Remittances and other prepaid cards are estimated to account for 14% and 6% of the market respectively. Estimates by ICICI suggest the prepaid cards market is expected to grow by almost 75% in 2010 year-on-year, rising from $2.9 billion to $5 billion. 
Axis Bank is the domestic leader in prepaid cards, with a 39% market share of followed by Itz cash cards at 22% and ICICI bank at 16%. Other players include SBI, HDFC Bank and Punjab National Bank. In the multipurpose cards market, Itz Cash Card Limited is the leading player. It is the largest firm in the non-banked category for prepaid cards. As for the number of debit cards issued, SBI dominates with a 37% share followed by ICICI bank at 11%.

Factors influencing the growth of the industry

Important features driving the debit/prepaid card industry include the confident growth trajectory of the Indian economy, the availability of a payment infrastructure embracing both private and public sector banks,  and increased penetration of  mobile telephony.  India’s economic expansion remains the catalyst for a dramatic change among the country’s consumers. GDP growth has averaged around 7% since 1997 and India was able to keep its economy growing at a credible rate even during the 2008-2009 slump, managing +5.4% in 2009. This broad based growth is creating a potent middle class, primarily urban based, who are leading the spending and usage of plastic cards. While there is no official definition of how to classify the middle class in India, consensus seems to have settled on a figure of c-200-300 million people. Even using the most aggressive estimates of its size, the middle class comprises less than 30 percent of the population. With sufficient disposable income to spend on goods and services, the middle class is an attractive target for prepaid cards.

According to a recent study if India is able to maintain its current growth trajectory, average household incomes will triple over the next two decades and it will become the world’s 5th-largest consumer economy by 2025, up from 12th now. Private consumption plays a much larger role in India’s growth than it has in that of other developing countries. In 2005, private spending reached about 17 trillion Indian rupees ($372 billion), accounting for more than 60 percent of India’s GDP.

As for payment infrastructure, most Indian banks have been widening their networks of automated teller machines (ATMs) in order to expand their business. Banks have also been installing increasing numbers of point of sale (POS) terminals (electronic data-capture swipe machines for accepting debit and credit card payments) at retailers. As of 2010, there are 40,000 ATMs and 450,000 POS terminals in India. A majority (more than 70%) of these ATMs and POS terminals are located in cities with the rest in small towns and villages.  The key cities which lead in number of ATMs include Mumbai, Delhi, Kolkata, Bangalore, Chennai, Ahmadabad, Hyderabad, Pune, Kanpur, Surat, Jaipur and Lucknow.
Another important infrastructure requirement for the development of banking services and prepaid cards business is a credible telecom network. India has been investing heavily in its telecom infrastructure. It is the world's fastest growing telecommunications market (CAGR of 52%), with 671.69 million telephones. Close to 95% of all phones in India are mobile phones,  with a penetration rate close to 57%. 

Potential for expansion in rural areas

As telephone ownership in urban areas matures, rural areas are taking the lead in adding new phones. Rural areas added an average of 8.76 million phones monthly during December 2009 to March 2010. By July 2010, the number of mobile phones in rural India had reached 236 million.  This number is markedly higher than the 187 million adult population living in rural India with bank accounts. In short there are a significant number of people with mobile phones but without bank accounts in rural India. This gap will only increase as millions of mobile phones are added monthly in rural India.
This is an attractive back-drop for starting mobile banking services in rural India. ‘Mobile wallets’ would bring low-cost banking & remittance services to millions, for whom banking services are not readily available or easily accessible. The attraction is that the mobile telephony infrastructure is well developed. This offers an attractive opportunity to open new markets and business opportunities for service providers, banks, mobile operators & merchants.

Leading domestic banks like SBI, ICICI, HDFC, AXIS and Canara all offer mobile banking services in India. For example, iMobile, a mobile banking application offered by ICICI Bank, assists its customers to carry out mobile money transfers, bill payments and check credit card balance through their mobile. This mobile application covers savings bank, Credit Card and Loan accounts. By using iMobile almost all internet banking transactions can be done on mobile phones.

Factors driving the prepaid cards Industry
Advantages & disadvantages
Types of debit/prepaid cards

Prepaid card infrastructure
Banking in India: Introduction

Influence of macroeconomics

Demographic analysis
Urban/rural divide
Mobile banking and telephones

Market overview
Debit cards
Prepaid cards

Market segmentation
Debit & prepaid cards
Prepaid cards

Competition: debit cards

Competition: prepaid cards

Competition: financials

Axis Bank: A case study

ICICI Bank: A case study

Swot: Prepaid card industry

Profile of leading banks



Purchase information:

Please complete the form below so that we can contact you to confirm your order and take your payment. If you have any queries, please contact Jeannie Lam on +44 (0)20 7563 5605 or Christina Yeo (Asia-Pacific) on +65 6383 4688.

Please ensure you provide sufficient detail below so that we can contact you to complete the purchase.


Data Protection Act
VRL may contact you with information about our other products and services. Please tick if you prefer NOT to receive such information by any of the following:

VRL occasionally shares data, on a secure basis, with other reputable companies who may wish to contact you with information about products and services.