The Mexian prepaid card market is expected to increase from US$19.57bn in 2022 to reach US$33.80bn by 2026.
The report, from Research and Markets, shows that the emergence of innovative prepaid card solutions has accelerated the growth of the prepaid card market in Mexico. With a rising fintech industry coupled with a large unbanked population, Mexico is a country of contrasts.
The last four to eight quarters have witnessed a high usage of prepaid cards in the country. This can be attributed to the rising fintech and neobanks activity in the country. These firms are launching innovative, low-cost prepaid solutions to attract more customers, thereby boosting the prepaid card market in the country.
Another key driver of growth in the prepaid card market in Mexico is the usage of welfare cards offered by the government, such as transport cards, payroll cards, and gift cards. The publisher expects the prepaid card market to witness robust growth over the next four to six quarters in Mexico as the fintech firms keep exploring the market with their innovative product launches.
Digital payment providers are partnering with lending companies to launch prepaid card solutions in Mexico
In Mexico, there is almost 40 million unbanked population. With the change in the payment trends in the country, fintechs are entering into strategic partnerships to launch prepaid card solutions with the intention of providing financial inclusion in the country.
- In August 2021, Mexico-based i2c, a digital payment provider partnered with KEO, a lending company and Mexican customer loyalty program PAYBACK to launch KEO PAYBACK American Express Card, a prepaid card solution,
- This new card will help customers to access a financial alternative that will enable them to build credit history.
- Moreover, this prepaid card will provide customers to receive the benefits of the loyalty program and also access the American Express network for both online and international purchases.
- The customers will be provided quick credit approval on the basis of the underwriting process done, and they will not require any credit check or paperwork for the same.
Global players are expanding their prepaid card solutions in Mexico
The huge unbanked population, together with the transition towards cashless payments among consumers, have attracted global players to expand the prepaid card solutions in the country.
- In November 2021, Tipalti, a global payables automation company, announced a partnership with a leading global prepaid card payment solution, Intercash, to expand their prepaid debit card solutions for international payees and partners.
- The partnership will allow Tipalti users to use Intercash prepaid debit cards in 192 countries, including Latin America and Southeast Asia.
- This Tipalti Intercash prepaid debit card is a Mastercard that can be used for online and offline transactions and also at ATMs for immediate purchases and cash withdrawals.
- This prepaid card is an alternative payment option for especially for the unbanked and underbanked population. Moreover, it is helpful for those companies that rely on partners in countries and regions with limited financial infrastructure.
Mexican digital wallets are raising funds to expand their business
- In May 2021, Mexico-based blockchain and bank-connected digital wallet, Airtm, attracted US$15 million investments from Stellar Development Foundation.
- The funds will be used by Airtm to develop its platform through integration with Stellar, which will make its payment services more seamless, cost-effective, and safe.