Non-profit trade association Prepaid International Forum today said prepaid cards will play an important role in financial inclusion in India.
"With the government now focusing more on financial inclusion the prepaid card will play a vital role in unbanked areas," Prepaid International Forum's Chairman Chris Reddish told reporters here.
Prepaid cards are plastic cards with pre-loaded cash enabling users to avoid carrying cash and making it convenient to use at merchant establishments and ATMs.
Reddish expects their demand to grow significantly in the coming years on the back of a rise in usage.
"Prepaid cards market is growing at 6-7 per cent annually with salary, travel and gift cards being the most popular ones. It will continue to grow in the coming years," he added.
"Since prepaid card ownership is still at a nascent stage in India, there is a huge opportunity for financial institutions to grow their prepaid card business and enable more people to experience the benefits of a modern payment system," he said.
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According to a survey by Visa, the size of the potential prepaid cards market in India is estimated at $93 billion per year while the present market size is estimated at around $4-5 billion in the country.
Reddish said around 12 banks in India such as ICICI Bank, HDFC Bank, Axis Bank and SBI are the leading players in the prepaid cards segment.