Visa’s CEO is very optimistic about the prospects for Visa prepaid debit cards, both in the U.S. and around the world. Visa sees the prepaid debit market as being a $1 Trillion (yes, that’s TRILLION) market in the U.S. (and a $3 Trillion market around the globe).
In a conference call on July 29 (discussing Visa’s earnings in the second quarter 2009), Joseph W. Saunders (Visa Incorporated’s Chairman of the Board and Chief Executive Officer) had the following optimistic comments about the prepaid debit card market.
We also continue to make very nice headway in the prepaid space, not only here in the U.S. but in a number of regions globally. Prepaid, which is a natural extension of our already successful debit presence, is a business that we have been in for quite some time in the U.S. and in which we are seeing enormous opportunity internationally.
Domestically we currently run 66 different programs with 38 states for government disbursements. In the healthcare arena, seven of the top 10 insurance companies offer Visa spending account cards.
Other important categories in which we are active and have been quite successful include gift cards, general purpose reloadable cards, and payroll programs, to name a few.
In the U.S., we believe this is a $1 trillion potential market while globally it could be as high as $3 trillion.
Stacked up against worldwide Visa payment volume for the 12 months through March of $2.7 trillion, it’s easy to see that even a nominal penetration of this market could be needle moving for us.
The largest opportunity globally is penetrating the under-banked segment with general purposed reloadable cards. The under-banked includes both the under-served, those who don’t have access to mainstream financial services, and those that choose for a wide variety of reasons alternative financial services.
In the U.S., about $80 million individuals fall into the under-banked category. Globally the under-banked may be a majority of consumers. Our success in debit in the U.S. should provide key advantages as we further penetrate the prepaid space.
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