LONDON – 22 December 2015
Italians opt for prepaid cards instead of traditional payment cards
The traditionally credit-averse nature of Italian consumers, coupled with their conservative spending attitude, is expected to result in a decline in credit card-based transactions. According to Timetric, this trend is expected to reduce new credit card issuance over the next five years and increase the number of prepaid cards as Italians prefer pre-planned or budgeted spending.
Timetric study finds that the number of prepaid cards in circulation increased from 12.4 million in 2010 to 24.1 million in 2014 at a CAGR of 18.13%, and this number is expected to further increase over the forecast period to reach 32.4 million by 2019. The prepaid card market recorded strong growth notably due to improved infrastructure of POS terminals, security features and promotional offers by card issuers.
Manish Kumar Sah, Analyst at Timetric, comments: “Italian consumers prefer to use prepaid cards to avoid costs associated with opening new current accounts or maintaining the existing ones. To capitalise on rising consumer demand for prepaid cards, issuers are now adding extra features such as online functionality, global usability, easy reloading and contactless functionality.”
“Banks now offer the so-called ‘account cards’ – IBAN-enabled prepaid cards with current account functionalities. The cards are exempted from stamp duties and can be used to conduct card-based transactions such as salary, utility bill payments and online or in-store purchases. Moreover, card personalization is also an important strategy adopted by issuers to market prepaid cards: customers are now able to customise their cards by adding photos, themes, designs or company logos,” Kumar Sah adds.
While prepaid cards recorded strong growth during the review period, traditional payment cards delivered poor performance in the last few years. The number of debit cards increased from 36.2 million in 2010 to just 48.1 in 2014. Meanwhile, the number of credit cards declined slightly – from 12.7 in 2010 to 10.5 in 2014 – a trend which is expected to continue over the next five years, to reach 10.6 million cards by 2019.
Notes to Editors
All information is taken from the Timetric report: ‘The Cards and Payments Industry in the Italy: Emerging Trends and Opportunities to 2019.’
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