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www.bricdata.com Market Opportunities and Emerging Trends in the Prepaid Card Market in BRIC Countries Industry Forecast Report Reference code: IS0209MR Published: June 2012 BRICdata John Carpenter House 7 Carmelite Street London EC4Y 0BS United Kingdom Tel: +44 (0) 20 7936 6400 Fax: +44 (0) 20 7336 6813 www.bricdata.com
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Page 1: Market Opportunities and Emerging Trends in the Prepaid ...The Indian online retail market is developing rapidly, which will support the growth of India’s prepaid cards market over

www.bricdata.com

Market Opportunities and

Emerging Trends in the Prepaid

Card Market in BRIC Countries

Industry Forecast Report

Reference code: IS0209MR

Published: June 2012

BRICdata

John Carpenter House

7 Carmelite Street

London EC4Y 0BS

United Kingdom

Tel: +44 (0) 20 7936 6400

Fax: +44 (0) 20 7336 6813

www.bricdata.com

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EXECUTIVE SUMMARY

Market Opportunities and Emerging Trends in the Prepaid Card Market in BRIC Countries Page 2

© BRICdata. This product is licensed and is not to be photocopied Published: June 2012

1 Executive Summary

Brazil

Market size

The Brazilian prepaid cards market increased in value from US$ X.X billion in 2007 to US$X.XX billion in 2011, at

a compound annual growth rate (CAGR) of XX.XX% during the review period (2007–2011).

The Brazilian prepaid cards market is expected to continue growing over the forecast period (2012–2016), to

reach a value of US$XX.X billion in 2016.

Trends and growth drivers

Brazil’s GDP at constant prices increased at a CAGR of X.XX% during the review period, to value US$XXX.X

billion in 2011. The country’s GDP is projected to register a CAGR of X.XX% over the forecast period, to reach a

US$X.X billion in 2016. The strong economic growth in Brazil is expected to drive the growth of prepaid cards in

the country.

The Brazilian population is largely unbanked, and there is not comprehensive access to banking services across

the country. The country’s unbanked population is expected to account for 75 million people. Prepaid cards

provide an alternative to cash for the large unbanked population, and the prepaid cards market can help the

country achieve complete financial inclusion.

The use of cards as a payment system is popular in Brazil. According to Associação Brasileira das Empresas de

Cartões de Crédito e Serviços (ABECS), the total number of credit cards in Brazil increased by X% during 2011,

to reach XXX.X million at the end of the year, while the number of debit cards increased by X% during 2011, to

reach XXX.X million at the end of the year. In addition, XXX.X million private label cards are in circulation in

Brazil. As Brazilian consumers are already aware of the concept of payment cards, it easy for companies to

promote prepaid cards in the country.

The Brazilian government passed a law in October 2011, which requires transport companies to pay truck drivers

through an electronic payment system. Since many truck drivers in Brazil do not have a bank account, the

prepaid cards market is expected to be used as an alternative payment option by transport companies.

Another key factor driving the growth of the Brazilian prepaid cards market is the government efforts to

encourage consumers to adopt electronic payment system. The Brazilian government passed a law that levies a

X.XX% charge on all foreign transactions made through Brazilian credit cards. However, since prepaid cards are

preloaded with Brazilian real, the transactions made through them are treated as domestic payment and have a

lower tax rate of X.XX%. As a result, Brazilians starting to use prepaid travel cards for international travel.

Challenges

One of the main constraints hindering the use of payment cards is the threat of fraud and theft. The large number

of online frauds is dissuading Brazilians from using payment cards in e-commerce.

Brazil currently does not have regulation for open-loop prepaid cards. A proper regulatory system has to be in

place to attract companies and increase prepaid card sales.

Competitive landscape

Banks and financial institutions are the leading providers of the prepaid cards in the Brazilian prepaid cards

market. Some of the companies operating in the Brazil prepaid cards market include Banco do Brazil, Banco

Cruzeiro do Sul SA, American EXpress and CBSS.

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EXECUTIVE SUMMARY

Market Opportunities and Emerging Trends in the Prepaid Card Market in BRIC Countries Page 3

© BRICdata. This product is licensed and is not to be photocopied Published: June 2012

Russia

Market size

The Russian prepaid cards market is expected to value US$XX.X billion in 2012, after registering an annual

growth rate of XX%. The market grew at a CAGR of XX.XX% during the review period, and is projected to grow

at a CAGR of XX.XX% over the forecast period, to reach a value of US$XXX.X billion in 2016.

The volume of prepaid cards in circulation in Russia increased almost 30-times from XXXX in 2007 to XX.X

million units in 2011. The prepaid cards market also registered a threefold increase in volume in 2009. The

prepaid cards market is expected to register robust growth over the forecast period. This strong growth reflects

the fact that consumers, public-sector organizations and prepaid card issuers are recognizing the benefits offered

by this form of payment and its ability to meet a broad variety of needs.

Trends and growth drivers

The Russian government continues to be the main contributor to the growth of the prepaid cards market, as a

significant proportion of total government benefit spending is currently routed through prepaid cards. This is

because prepaid cards enable the public sector to minimize welfare benefit fraud by taking cash out of the

system and ensuring that payments reach those intended. Prepaid cards are used in various public-sector areas,

including student scholarships and benefits for old citizens and pensioners.

Instant issuance cards and virtual prepaid cards are popular in Russia, while gift cards have not yet registered

wide appeal. As such, companies are focusing more on instant issuance cards. These cards are issued jointly

with the trade and service enterprises.

In Russia, prepaid cards are primarily used to make low-value payments for goods and services through the

internet and mobile phones.

Russia’s annual disposable income valued US$X.X trillion in 2011, and grew at a CAGR of X.XX% during the

review period. Annual disposable income is expected to grow at a CAGR of X.XX% over the forecast period, to

reach US$X.X trillion in 2016. The increasing disposable income is expected to have a positive impact on the

prepaid cards market, as the purchasing power of consumers will increase.

According to the new instructions of the Central Bank of Russia in 2011, the limit of prepaid card transactions

was increased from RUBX,000 to RUBXX,000. This limit increase is expected to make the issuing of prepaid

cards a more profitable proposition, and will also make prepaid cards more popular among private clients.

Russia’s rules and regulations regarding prepaid cards have been relaxed, which will support the market’s

growth. For example, prepaid cards are now available at the banks without requiring any identification and a

prepaid card can also be reloaded. In addition, banks are allowed to issue prepaid gift cards without a

cardholder’s name or surname.

Challenges

Although many banks in Russia issue payroll cards, the payroll cards category only forms a small part of the total

prepaid card spending. The main reason for this is that most prepaid card issuers still have a strong preference

for selling current account and debit products, as they are believed to offer a higher profit margin and are better

suited to cross-selling.

Despite the strong growth in the volume and value of Russian prepaid card transactions during the review period,

the overall share of prepaid cards in the Russian payment system remains very low. Prepaid cards accounted for

only 1.6% of the total payment cards issued in the country in 2009.

Prepaid cards are often used to make online purchases. However, Russians tend to be skeptical of making online

purchases. Furthermore, mobile payments fraud is constraining the growth of prepaid cards in the country.

Competitive landscape

The Russian prepaid cards market is dominated by state-owned banks, and this is expected to continue over the

forecast period. State-owned banks particularly target the government as the Russian government is increasingly

using prepaid cards to distribute welfare benefits.

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EXECUTIVE SUMMARY

Market Opportunities and Emerging Trends in the Prepaid Card Market in BRIC Countries Page 4

© BRICdata. This product is licensed and is not to be photocopied Published: June 2012

India

Market size

The Indian prepaid cards market increased in value at a CAGR of XX.XX% during the review period, from

US$X.XX billion in 2007 to US$X.X billion in 2011. The market is expected to continue growing strongly over the

forecast period, to reach a value of US$XX.X billion in 2016.

The number of prepaid cards issued in India increased from X.X million in 2007 to XX.X million units in 2011, at a

CAGR of XX.X% during the review period. The volume of Indian prepaid cards is projected to reach XX.X million

cards in 2016, after achieving a CAGR of XXX.X% over the forecast period.

Trends and growth drivers

Prepaid cards are gaining popularity at the expense of credit cards in India. This can be indicated by the fact that

the number of outstanding credit cards in the country declined from 27.6 million in March 2008 to 18 million in

March 2011. Banks are also being cautious in their promotion of credit cards as they fear a credit default. Instead

Indian banks are focusing on promoting prepaid cards.

A rising number of retail companies and brands in India are now offering prepaid cards as a strategy to retain

customers and increase sales. Prepaid cards are increasingly being used by companies as a tool to retain

customers and also ensure regular sales.

The Indian online retail market is developing rapidly, which will support the growth of India’s prepaid cards market

over the forecast period. While debit and credit cards can be used for online purchases, prepaid cards are

expected to be used for more online retail purchases due to the improved safety offered by prepaid cards.

The Indian prepaid travel cards category increased in value at a CAGR of more than XX% during the review

period. This growth is being driving by the strong demand from corporations, which account for the majority of the

total travel cards category value. Travel cards help companies control the risk of their employees misspending

the company’s money, as these cards can help companies track and control employee spending during business

trips.

Challenges

The lack of consumer awareness about the types of prepaid cards that are available in the country is one of the

main challenges preventing wider prepaid card usage in the country. Furthermore, prepaid cards have

traditionally not been as aggressively marketed by banks as debit and credit cards. However, this trend is now

changing, as the high growth recorded in the prepaid cards market is encouraging more companies and banks to

provide prepaid card services. As such, Indian banks are now undertaking aggressive marketing and promotion

activities to increase prepaid cards awareness in India.

Indians traditionally prefer conducting financial transactions through cash rather than payment cards. Almost 97%

of the total retail transactions in India are cash-based. Although this is changing gradually, and the young

population is comfortable using payment cards, it will take a long time before prepaid card transactions are used

as frequent as cash-based transactions.

Many retailers in India still do not have the infrastructure in place to accept prepaid cards. There are also a

limited number of point of sales (POS) terminals in the country that accept prepaid cards. Factors such as the low

number of ATMs and POS terminals need to be addressed to encourage more transactions though prepaid

cards. As a result, the usage of Indian prepaid cards is limited to select places with plenty of POS terminals.

Competitive landscape

The State Bank of India is the largest debit card issuer in the country, and the company accounted for XXX

million debit cards in circulation across India in 2011. Punjab National Bank was the second-largest debit card

issuer, with XX.X million debit cards in circulation in 2011, while ICICI Bank had XX.X million debit cards in

circulation.

The Indian prepaid cards market is highly consolidated among three leading companies: Axis Bank, ICICI Bank

and Itz Cash Card. These three companies together accounted for a share of XX% of the market value in 2011.

Axis Bank accounted for the largest market share of XX% of prepaid card revenues, followed by Itz Cash Card,

with a market share of XX%, and ICICI Bank, with a market share of XX%.

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EXECUTIVE SUMMARY

Market Opportunities and Emerging Trends in the Prepaid Card Market in BRIC Countries Page 5

© BRICdata. This product is licensed and is not to be photocopied Published: June 2012

China

Market size

The Chinese prepaid cards market increased in value from US$XX.X billion in 2007 to US$XX.X billion in 2011,

at a CAGR of XX.X% during the review period.

The Chinese prepaid cards market is expected to continue growing at a CAGR of XX.XX% over the forecast

period, from US$XXX.X billion in 2011 to US$XXX.X billion in 2016.

Trends and growth drivers

The Chinese consumers are already familiar with prepaid cards. Furthermore, the penetration of prepaid cards

among the consumers in Chinese cities is very high as almost everyone has a prepaid card.

The Chinese prepaid market has been established for over 10 years. As such, the market is relatively mature and

was the second-largest in the world after the US in 2011.

Since the high level of prepaid card awareness extends beyond consumers and into Chinese businesses, the

majority of the country’s prepaid card providers are now seeking to expand their market share among

corporations. Businesses account for the second-largest potential prepaid card customer group after travelers.

In China, there are only a few business-to-customer (B2C) prepaid products, and public transport cards

accounted for 95% of the B2C prepaid cards in 2011. Chinese retailers also issue prepaid cards that constitute a

very small portion of overall prepaid card market.

Giving gifts is very popular in China, and Chinese companies often give gifts to their clients, partners and

business contacts to show their appreciation. This has led to Chinese prepaid issuers to focus more on selling gift

cards corporate clients in order to increase their revenues.

Challenges

One of the main constraints hindering the use of payment cards is the threat of corruption. Bribes that are paid in

the form of prepaid cards pose a potential challenge for the reputation of the Chinese prepaid card market.

The Chinese regulations that have been devised to monitor the increasing corruption through prepaid cards are

stringent. As such, it has become very difficult for the foreign banks and retailers to obtain licenses to issue the

prepaid cards.

Competitive landscape

Chinese retailers and Chinese public transport corporations are the leading providers of the prepaid cards. Many

corporations in China also issue payroll cards and various other gift cards, which is becoming a very popular

trend in China.

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TABLE OF CONTENTS

Market Opportunities and Emerging Trends in the Prepaid Card Market in BRIC Countries Page 6

© BRICdata. This product is licensed and is not to be photocopied Published: June 2012

TABLE OF CONTENTS

1 Executive Summary .............................................................................................................................. 2 2 BRIC Countries Comparison .............................................................................................................. 10

2.1 Market Opportunity ............................................................................................................................ 10

2.2 Macroeconomic Drivers ..................................................................................................................... 11

3 Prepaid Cards Market in Brazil ........................................................................................................... 12

3.1 Market Environment ........................................................................................................................... 12

3.1.1 Banking industry structure in Brazil ............................................................................................ 12

3.1.2 Payment system ....................................................................................................................... 13

3.1.3 Regulatory framework ............................................................................................................... 15

3.2 Market Size and Growth Potential ...................................................................................................... 17

3.2.1 Brazil banking industry market size ........................................................................................... 17

3.2.2 Brazil prepaid cards market size ................................................................................................ 19

3.3 Marketing Strategies Adopted for Prepaid Cards ................................................................................ 21

3.4 Key Trends, Growth Drivers and Challenges ...................................................................................... 22

3.4.1 Economic drivers....................................................................................................................... 23

3.4.2 Consumer drivers ...................................................................................................................... 25

3.4.3 Business trends and growth drivers ........................................................................................... 27

3.4.4 Challenges ................................................................................................................................ 29

3.5 Competitive Landscape ...................................................................................................................... 30

4 Prepaid Cards Market in Russia ......................................................................................................... 32

4.1 Market Environment ........................................................................................................................... 32

4.1.1 Regulatory framework ............................................................................................................... 32

4.1.2 Banking industry structure in Russia .......................................................................................... 33

4.1.3 Payment system ....................................................................................................................... 34

4.2 Market Size and Growth Potential ...................................................................................................... 35

4.2.1 Russian banking industry market size ........................................................................................ 35

4.2.2 Russian prepaid cards market size ............................................................................................ 37

4.3 Key Trends, Growth Drivers and Challenges ...................................................................................... 39

4.3.1 Economic drivers....................................................................................................................... 40

4.3.2 Consumer drivers ...................................................................................................................... 42

4.3.3 Business trends and growth drivers ........................................................................................... 44

4.3.4 Challenges ................................................................................................................................ 45

4.4 Marketing Strategies Adopted for Selling Prepaid Cards in Russia ..................................................... 47

4.5 Competitive Landscape ...................................................................................................................... 49

5 Prepaid Cards Market in India ............................................................................................................ 50

5.1 Market Environment ........................................................................................................................... 50

5.1.1 Regulatory framework ............................................................................................................... 50

5.1.2 Banking industry structure in India ............................................................................................. 52

5.1.3 Payment system ....................................................................................................................... 60

5.2 Market Size and Growth Potential ...................................................................................................... 66

5.2.1 Indian banking industry market size ........................................................................................... 66

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TABLE OF CONTENTS

Market Opportunities and Emerging Trends in the Prepaid Card Market in BRIC Countries Page 7

© BRICdata. This product is licensed and is not to be photocopied Published: June 2012

5.2.2 Indian prepaid cards market size ............................................................................................... 68

5.3 Key Trends, Growth Drivers and Challenges ...................................................................................... 70

5.3.1 Economic drivers....................................................................................................................... 71

5.3.2 Consumer drivers ...................................................................................................................... 73

5.3.3 Business trends and growth drivers ........................................................................................... 75

5.3.4 Challenges ................................................................................................................................ 78

5.4 Marketing Strategies Adopted for Selling Prepaid Cards in India ........................................................ 80

5.5 Competitive Landscape ...................................................................................................................... 83

6 Prepaid Cards Market in China ........................................................................................................... 85

6.1 Market Environment ........................................................................................................................... 85

6.1.1 Regulatory framework ............................................................................................................... 85

6.1.2 Banking industry structure in China ........................................................................................... 86

6.1.3 Payment system ....................................................................................................................... 88

6.2 Market Size and Growth Potential ...................................................................................................... 89

6.2.1 China banking industry market size ........................................................................................... 89

6.2.2 China prepaid cards market size ............................................................................................... 91

6.3 Key Trends, Growth Drivers and Challenges ...................................................................................... 93

6.3.1 Economic drivers....................................................................................................................... 94

6.3.2 Consumer drivers ...................................................................................................................... 96

6.3.3 Business drivers ........................................................................................................................ 98

6.3.4 Business trends ........................................................................................................................ 99

6.3.5 Challenges .............................................................................................................................. 100

6.4 Marketing Strategies Adopted for Selling Prepaid Cards in China ..................................................... 102

6.5 Competitive Landscape .................................................................................................................... 103

7 Appendix ........................................................................................................................................... 104

7.1 Definitions ........................................................................................................................................ 104

7.2 About BRICdata ............................................................................................................................... 105

7.2.1 Areas of expertise ................................................................................................................... 105

7.3 Methodology .................................................................................................................................... 106

7.4 Disclaimer ........................................................................................................................................ 107

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TABLE OF CONTENTS

Market Opportunities and Emerging Trends in the Prepaid Card Market in BRIC Countries Page 8

© BRICdata. This product is licensed and is not to be photocopied Published: June 2012

LIST OF FIGURES

Figure 1: BRIC Countries’ Prepaid Card Market Comparison, 2007–2016 ................................................................................................ 10 Figure 2: Brazilian Transaction Volume by Payment Method (% Share), 2010 ......................................................................................... 13 Figure 3: Brazilian Transaction Value by Payment Method (% Share), 2010 ............................................................................................ 13 Figure 4: Brazilian Transaction Value by Payment Method (BRL Billion), 2007–2011............................................................................. 14 Figure 5: Brazilian Banking Industry Loans and Deposits (US$ Billion), 2007–2011 .............................................................................. 17 Figure 6: Brazilian Banking Industry Value by Loans and Deposits (US$ Billion), 2012–2016 .............................................................. 18 Figure 7: Brazilian Prepaid Cards Market Size (US$ Billion), 2007–2011 .................................................................................................. 19 Figure 8: Brazilian Prepaid Cards Market Size (US$ Billion), 2012–2016 .................................................................................................. 20 Figure 9: Trends, Drivers and Challenges in the Brazilian Prepaid Cards Market ................................................................................... 22 Figure 10: Brazilian GDP at Constant Prices (US$ Billion), 2007–2016 ..................................................................................................... 23 Figure 11: Brazilian Inflation Rate (%), 2007–2016........................................................................................................................................ 24 Figure 12: Brazilian Annual Disposable Income (US$ Billion), 2007–2016 ............................................................................................... 25 Figure 13: Brazilian Unemployment Rate (%), 2007–2016 ........................................................................................................................... 26 Figure 14: Brazil Point of Sales Terminal, 2007–2011 .................................................................................................................................. 27 Figure 15: Brazilian Total Credit as Percentage of GDP (%), 2007–2011 ................................................................................................... 28 Figure 16: Brazilian Prepaid Cards Market Challenges................................................................................................................................ 29 Figure 17: Russian Banking Industry Value by Loans and Deposits (US$ Billion), 2007–2011 ............................................................. 35 Figure 18: Russian Banking Industry Value by Loans and Deposits (US$ Billion), 2012–2016 ............................................................. 36 Figure 19: Russian Prepaid Cards Market Size (US$ Billion), 2007–2011 ................................................................................................. 37 Figure 20: Russian Prepaid Cards Market Size (US$ Billion), 2012–2016 ................................................................................................. 38 Figure 21: Russian Prepaid Cards Market Trends, Growth Drivers and Challenges ............................................................................... 39 Figure 22: Russian GDP at Constant Prices (US$ Billion), 2007–2016 (Base Year 1999–2000) ............................................................. 40 Figure 23: Russian Inflation Rate (%), 2007–2016......................................................................................................................................... 41 Figure 24: Russian Annual Disposable Income (US$ Billion), 2007–2016 ................................................................................................ 42 Figure 25: Russian Unemployment Rate (%), 2007–2016 ............................................................................................................................ 43 Figure 26: Russian Prepaid Cards Market Challenges................................................................................................................................. 45 Figure 27: Russian Prepaid Cards Marketing Strategies ............................................................................................................................. 47 Figure 28: Indian Banking Industry Structure ............................................................................................................................................... 52 Figure 29: Indian Public-Sector Bank Distribution by Residential Area (%), 2011 ................................................................................... 54 Figure 30: Indian Public-Sector Banks Share of Total Banking Assets (%), 1991–2011 ......................................................................... 54 Figure 31: Indian Private-Sector Bank Distribution by Residential Area (%), 2011 ................................................................................. 57 Figure 32: Indian Foreign Bank Distribution by Residential Area (%), 2011 ............................................................................................. 59 Figure 33: Indian Credit Card Market Share (%), 2011 ................................................................................................................................. 63 Figure 34: Indian Electronic Transaction Volume (% Share), FY2011 ....................................................................................................... 64 Figure 35: Indian Banking Industry Transaction Method Evolution........................................................................................................... 65 Figure 36: Indian Banking Industry Value by Loans and Deposits (US$ Billion), 2007–2011................................................................. 66 Figure 37: Indian Banking Industry Value by Loans and Deposits (US$ Billion), 2012–2016................................................................. 67 Figure 38: Indian Prepaid Cards Market Size (US$ Billion), 2007–2016 ..................................................................................................... 68 Figure 39: Indian Prepaid Cards Volume (Million), 2007–2016.................................................................................................................... 69 Figure 40: Indian Prepaid Cards Market Trends, Growth Drivers and Challenges .................................................................................. 70 Figure 41: Indian GDP at Constant Prices (US$ Billion), 2007–2016 .......................................................................................................... 71 Figure 42: Indian Inflation Rate (%), 2007–2016 ............................................................................................................................................ 72 Figure 43: Indian Annual Per Capita Disposable Income (US$), 2007–2016 ............................................................................................. 73 Figure 44: Indian Urban and Rural Population (%), 2007–2016................................................................................................................... 74 Figure 45: Indian Credit Card Volume (Million), 2007–2011......................................................................................................................... 75 Figure 46: Indian Prepaid Card Market Challenges ...................................................................................................................................... 78 Figure 47: Indian Prepaid Cards Market Share (%), 2011 ............................................................................................................................ 83 Figure 48: Chinese Banking Industry Value by Loans and Deposits (US$ Billion), 2007–2011 ............................................................. 89 Figure 49: Chinese Banking Industry Value by Loans and Deposits (US$ Billion), 2012–2016 ............................................................. 90 Figure 50:Chinese Prepaid Cards Market Size (US$ Billion), 2007–2011 .................................................................................................. 91 Figure 51: Chinese Prepaid Cards Market Size (US$ Billion), 2012–2016 ................................................................................................. 92 Figure 52: Chinese Prepaid Cards Market Trends, Growth Drivers and Challenges ............................................................................... 93 Figure 53: Chinese GDP at Constant Prices (US$ Billion), 2007–2016 (Base Year 1999–2000) ............................................................. 94 Figure 54: Chinese Inflation Rate (%), 2007–2016......................................................................................................................................... 95 Figure 55: Chinese Annual Disposable Income (US$ Billion), 2007–2016 ................................................................................................ 96 Figure 56: Chinese Unemployment Rate (%), 2007–2016 ............................................................................................................................ 97 Figure 57: Chinese Prepaid Card Business Drivers, 2011 ........................................................................................................................... 98 Figure 58: Chinese Prepaid Card Market Challenges................................................................................................................................. 100 Figure 59: Chinese Prepaid Card Marketing Strategies ............................................................................................................................. 102

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TABLE OF CONTENTS

Market Opportunities and Emerging Trends in the Prepaid Card Market in BRIC Countries Page 9

© BRICdata. This product is licensed and is not to be photocopied Published: June 2012

LIST OF TABLES

Table 1: BRIC Countries’ Prepaid Card Market Comparison (US$ Billion), 2007–2011 ........................................................................... 10 Table 2: BRIC Countries’ Prepaid Card Market Comparison (US$ Billion), 2012–2016 ........................................................................... 10 Table 3: BRIC Countries’ Macroeconomic Indicators, 2011 ........................................................................................................................ 11 Table 4: BRIC Countries’ Macroeconomic Indicators, 2011 ........................................................................................................................ 11 Table 5: Brazilian Banks by Type of Institution, 2011 .................................................................................................................................. 12 Table 6: Brazilian Banking Branch Network by Company (% Share), 2011 .............................................................................................. 12 Table 7: Brazilian Banking Industry Value by Loans and Deposits (US$ Billion), 2007–2011 ................................................................ 17 Table 8: Brazilian Banking Industry Value by Loans and Deposits (US$ Billion), 2012–2016 ................................................................ 18 Table 9: Brazilian Prepaid Cards Market Size (US$ Billion), 2007–2011 .................................................................................................... 19 Table 10: Brazilian Prepaid Cards Market Size (US$ Billion), 2012–2016 .................................................................................................. 20 Table 11: Brazilian Banking Assets by Leading Banks (% Share), 2011 ................................................................................................... 30 Table 12: Russian Banking Industry Value by Loans and Deposits (US$ Billion), 2007–2011 ............................................................... 35 Table 13: Russian Banking Industry Value by Loans and Deposits (US$ Billion), 2012–2016 ............................................................... 36 Table 14: Russian Prepaid Cards Market Size (US$ Billion), 2007–2011 ................................................................................................... 37 Table 15: Russian Prepaid Cards Market Size (US$ Billion), 2012–2016 ................................................................................................... 38 Table 16: Russian GDP at Constant Prices (US$ Billion), 2007–2016 (Base Year 1999–2000) ............................................................... 40 Table 17: Russian Inflation Rate (%), 2007–2016 .......................................................................................................................................... 41 Table 18: Russian Annual Disposable Income (US$ Billion), 2007–2016 .................................................................................................. 42 Table 19: Russian Unemployment Rate (%), 2007–2016 .............................................................................................................................. 43 Table 20: Indian Public-Sector Bank Distribution by Residential Area (%), 2011 .................................................................................... 53 Table 21: Indian Private-Sector Bank Distribution by Residential Area (%), 2011 ................................................................................... 56 Table 22: Indian Foreign Bank Distribution by Residential Area (%), 2011 ............................................................................................... 59 Table 23: Types of Debit Cards ....................................................................................................................................................................... 60 Table 24: Indian Debit Card Transaction Volume and Value, FY2009–FY2011 ......................................................................................... 62 Table 25: Indian Credit Card Transaction Volume and Value, FY2009–FY2011 ....................................................................................... 63 Table 26: Indian Electronic Transaction Volume and Value, FY2011 ......................................................................................................... 64 Table 27: Indian Banking Industry Value by Loans and Deposits (US$ Billion), 2007–2011 .................................................................. 66 Table 28: Indian Banking Industry Value by Loans and Deposits (US$ Billion), 2012–2016 .................................................................. 67 Table 29: Indian Prepaid Cards Market Size (US$ Billion), 2007–2016 ...................................................................................................... 68 Table 30: Indian Prepaid Cards Volume (Million), 2007–2016 ..................................................................................................................... 69 Table 31: Indian Companies Authorized to Provide Prepaid Payment Instruments by the RBI, 2009–2012 ........................................ 76 Table 32: Indian Prepaid Cards Market Share (%), 2011 .............................................................................................................................. 83 Table 33: Chinese Banking Industry Value by Loans and Deposits (US$ Billion), 2007–2011 ............................................................... 89 Table 34: Chinese Banking Industry Value by Loans and Deposits (US$ Billion), 2012–2016........................................................................ 90 Table 35: Chinese Prepaid Cards Market Size (US$ Billion), 2007–2011 ................................................................................................... 91 Table 36: Chinese Prepaid Cards Market Size (US$ Billion), 2012–2016 ................................................................................................... 92 Table 37: Chinese GDP at Constant Prices (US$ Billion), 2007–2016 (Base Year 1999–2000) ............................................................... 94 Table 38: Chinese Inflation Rate (%), 2007–2016 .......................................................................................................................................... 95 Table 39: Chinese Annual Disposable Income (US$ Billion), 2007–2016 .................................................................................................. 96 Table 40: Chinese Unemployment Rate (%), 2007–2016 .............................................................................................................................. 97

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BRIC COUNTRIES COMPARISON

Market Opportunities and Emerging Trends in the Prepaid Card Market in BRIC Countries Page 10

© BRICdata. This product is licensed and is not to be photocopied Published: June 2012

2 BRIC Countries Comparison

2.1 Market Opportunity

The BRIC countries is a label used to describe the world’s four largest emerging countries: Brazil, Russia, India and

China. The prepaid card market in BRIC countries, which includes both open-loop and closed-loop prepaid cards,

registered significant growth during the review period and is expected to continue developing rapidly over the forecast

period. China contained the largest prepaid cards market among BRIC countries during the review period, followed by

Russia, India and Brazil. The Chinese prepaid cards market valued US$ XXX.X billion in 2011. However, Russia

registered the strongest growth in prepaid card usage, as the prepaid card market registered a CAGR of XX.XX% during

the review period. India is expected to be the fastest-growing market for prepaid cards over the forecast period, after the

market increases in value at a CAGR of XX.XX%.

Table 1: BRIC Countries’ Prepaid Card Market Comparison (US$ Billion), 2007–2011

BRIC Countries Market Size, 2007 Market Size, 2011 CAGR 2007–2011

Brazil X.X X.X XX.XX%

Russia X.X XX.X XX.XX%

India X.X X.X XX.XX%

China XXX.X XXX.X XX.XX%

Source: BRICdata analysis © BRICdata

Table 2: BRIC Countries’ Prepaid Card Market Comparison (US$ Billion), 2012–2016

BRIC Countries Market Size, 2012 Market Size, 2016 CAGR 2012–2016

Brazil X.X XX.X XX..XX%

Russia XX.X XXX.X XX.XX%

India XX.X XX.X XX.XX%

China XXX.X XXX.X XX.XX%

Source: BRICdata analysis © BRICdata

Figure 1: BRIC Countries’ Prepaid Card Market Comparison, 2007–2016

Source: BRICdata analysis © BRICdata

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3 Prepaid Cards Market in Brazil

3.1 Market Size and Growth Potential

3.1.1 Brazil banking industry market size

The Brazilian banking industry is strongly governed and was largely unaffected by the global financial crisis. Total bank

deposits in Brazil valued US$ X.X trillion in 2011. Time and savings deposits accounted for the largest share of XX.X% of

these deposits, which corresponded to a value of US$XX trillion in 2011, while current account deposits accounted for the

remaining share of X.X%, which corresponded to a value of US$XXX.X billion. In addition, the total bank loans in Brazil

valued US$X.X trillion in 2011. Long-term loans accounted for 60.8% of the total Brazilian banking loans, and short-term

loans accounted for the remaining XX.X% in 2011.

Table 7: Brazilian Banking Industry Value by Loans and Deposits (US$ Billion), 2007–2011

2007 2008 2009 2010 2011

Short-term loans XXX.XX XXXX XXX.X XXXX XXXX

Long-term loans XXX.X XXX.X XXX.X XXX.X XXX.X

Total Loans XXX.X XXX.X XXX.X XXXX.X XXXXX

Current account deposits XXX.X XXX XXXX XXX.X XXX.X

Time and savings deposits XXXXX XXX.X XXXX.X XXXX.X XXXX.X

Total Deposits XXX.X XXXX XXXX.X XXXX.0 XXXX.X

Source: EIU and BRICdata analysis © BRICdata

Figure 5: Brazilian Banking Industry Loans and Deposits (US$ Billion), 2007–2011

Source: EIU and BRICdata analysis © BRICdata

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Brazil’s total bank deposits are expected to increase in value at a CAGR of X.XX% over the forecast period, to reach

US$X.X trillion in 2016. Meanwhile, the total loans are expected to register a CAGR X.XX%, to reach a value of US$XX

trillion in 2016. The expansion of banking services to the unbanked and under-banked Brazilian population will continue to

drive the growth of the banking industry over the forecast period.

Table 8: Brazilian Banking Industry Value by Loans and Deposits (US$ Billion), 2012–2016

2012 2013 2014 2015 2016

Short-term loans XXX.X XXX.X XXX.X XXXX XXXX

Long-term loans XXX.X XXX.X XXXX XXXX XXXX

Total Loans XXXX.X XXXX.X XXXXX XXXXX XXXX.X

Current account deposits XXX.X XXXX XXX.X XXX.X XXX.X

Time and savings deposits XXXX.X XXXX.X XXXX.X XXXX.X XXXX.

Total Deposits XXXX.X XXXX.X XXXX.X XXXX.X XXXX.X

Source: EIU and BRICdata analysis © BRICdata

Figure 6: Brazilian Banking Industry Value by Loans and Deposits (US$ Billion), 2012–2016

Source: EIU and BRICdata analysis © BRICdata

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3.1.2 Brazil prepaid cards market size

Brazilian prepaid cards increased in value from US$X.X billion in 2007 to US$X.X billion in 2011, at a CAGR of XX.XX%

during the review period. This growth is mainly attributed to the growing demand of prepaid card among younger

consumers.

Table 9: Brazilian Prepaid Cards Market Size (US$ Billion), 2007–2011

2007 2008 2009 2010 2011 CAGR 2007–2011

Prepaid Cards X.X X.X X.X X.X X.X XX.XX%

Source: BRICdata analysis © BRICdata

Figure 7: Brazilian Prepaid Cards Market Size (US$ Billion), 2007–2011

Source: BRICdata analysis © BRICdata

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The Brazilian prepaid cards market is expected to continue growing strongly, at a CAGR of XX.XX% over the forecast

period, to reach a value of US$XXX billion in 2016.

Table 10: Brazilian Prepaid Cards Market Size (US$ Billion), 2012–2016

2012 2013 2014 2015 2016 CAGR 2012–2016

Prepaid Cards XX XX.X XX.X XX.X XX.X XX.XX%

Source: BRICdata analysis © BRICdata

Figure 8: Brazilian Prepaid Cards Market Size (US$ Billion), 2012–2016

Source: BRICdata analysis © BRICdata

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4 Prepaid Cards Market in Russia

4.1 Market Size and Growth Potential

4.1.1 Russian banking industry market size

The Russian banking industry was severely affected by the global economic crisis during the review period. However, the

economy stabilized in 2010, and the banking industry prospered from the strong demand for loans. This significantly

improved the profitability of the banks across the country. However, the overall penetration of banking services in Russia

remains low and, as a result, there are strong growth prospects for the Russian banking industry to capitalize on over the

forecast period. Loans and deposits are both expected to increase over the forecast period. With the country’s

considerable industrial growth, the banking industry is also expected to profit from increased corporate borrowing. The

total short-term loans in Russia valued US$XXX.X billion in 2011, while long-term loans valued US$XXX.X billion. In terms

of deposits, the total current account deposits valued US$XXX.X billion in Russia in 2011, while time savings deposits

valued US$X.X trillion.

Table 12: Russian Banking Industry Value by Loans and Deposits (US$ Billion), 2007–2011

2007 2008 2009 2010 2011

Short-term loans XXXX XXX.X XXX.X XXX XXX.X

Long-term loans XXXX XXX.X XXX.X XXXX XXXX

Total Loans XXX.X XXX XXX.X XXX.X XXX

Current account deposits XXX.X XXXX XXXX.X XXXX XXX.X

Time and savings deposits XXX.X XXX XXX XXX.X XXXX.XX

Total Deposits XXX.X XXX.X XXX.X XXXX.XX XXXX.XX

Source: EIU and BRICdata analysis © BRICdata

Figure 17: Russian Banking Industry Value by Loans and Deposits (US$ Billion), 2007–2011

Source: EIU and BRICdata analysis © BRICdata

0

200

400

600

800

1000

1200

1400

1600

2007 2008 2009 2010 2011

Dep

osit

s a

nd

Lo

an

s in

US

$ B

illio

n

Total Loans in US$ Billion Total Deposits in US$ Billion

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The value of short-term loans in Russia is expected to increase from US$XXX.X billion in 2012 to US$XXX.X billion in

2016. Meanwhile, the value of long-term loans is projected to rise from US$XXX.X billion in 2012 to US$X.X trillion in

2016. In addition, current account deposits are expected to increase in value from US$XXX.X billion in 2012 to US$XXX.X

billion in 2016, and time and savings deposits are expected to increase from US$XX trillion in 2011 to US$X.X trillion in

2016. As a result of these expectations, the Russian banking industry’s total loans and total deposits value is projected to

register a CAGR of XX.XX% over the forecast period.

Table 13: Russian Banking Industry Value by Loans and Deposits (US$ Billion), 2012–2016

2012 2013 2014 2015 2016

Short-term loans XXX.X XXX.X XXX.X XXX.X XXXX

Long-term loans XXX.X XXX.X XXXX XXXX.XX XXXX.XX

Total Loans XXXX.XX XXXX.XX XXXX.XX XXXX.XX XXXXXX

Current account deposits XXXX XXXX XXX.X XXX.X XXXX

Time and savings deposits XXXX.XX XXXX.XX XXXX.XX XXXX.XX XXXX.XX

Total Deposits XXXX.XX XXXX.XX XXXX.XX 2XXX.XX XXXX.XX

Source: EIU and BRICdata analysis © BRICdata

Figure 18: Russian Banking Industry Value by Loans and Deposits (US$ Billion), 2012–2016

Source: EIU and BRICdata analysis © BRICdata

0

500

1000

1500

2000

2500

3000

3500

4000

2012 2013 2014 2015 2016

De

po

sits

an

d L

oan

s in

US$

Bill

ion

Total Loans in US$ Billion Total Deposits in US$ Billion

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4.1.2 Russian prepaid cards market size

The total value of prepaid cards in Russia increased from US$XX billion in 2007 to US$XX.X billion in 2011, at a CAGR of

XX.XX% during the review period. The growth is mainly attributable to the rising use of prepaid cards by the Russian

government to spend money on welfare activities. The government believes that by using prepaid cards for this purpose, it

can reduce fraud. This is because the money is anticipated to reach the intended beneficiaries since cash is not involved

in prepaid transactions.

Table 14: Russian Prepaid Cards Market Size (US$ Billion), 2007–2011

2007 2008 2009 2010 2011 CAGR 2007–2011

Prepaid Cards X.X X.X XX.X XX.X XX.X XX.XX%

Source: BRICdata analysis © BRICdata

Figure 19: Russian Prepaid Cards Market Size (US$ Billion), 2007–2011

Source: BRICdata analysis © BRICdata

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The strong growth in the Russian prepaid cards market is expected to continue, as the market is projected to achieve a

CAGR of XX.XX% over the forecast period, to reach a value of US$XXXX billion in 2016.

Table 15: Russian Prepaid Cards Market Size (US$ Billion), 2012–2016

2012 2013 2014 2015 2016 CAGR 2012–2016

Prepaid Cards XX.X XX.X XX.X XXXX XXX.X XX.XX%

Source: BRICdata analysis © BRICdata

Figure 20: Russian Prepaid Cards Market Size (US$ Billion), 2012–2016

Source: BRICdata analysis © BRICdata

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APPENDIX

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5 Appendix

5.1 Definitions

Prepaid card

A prepaid card is similar to debit and credit cards in how it looks and as it allows customers to make purchases without

cash or checks. However, it is unlike credit and debit cards as it is not linked to a bank account and it cannot take out debit

or credit.

A prepaid card has a zero balance until money is added to it. When customers make a purchase with a prepaid card, the

amount is subtracted from the balance on the card. Once the balance reaches zero, the card is empty. Some prepaid

cards can have money reloaded onto them in order that they can continue to be used. Others, such as several gift cards,

can be discarded when all of the funds are spent.

Open-loop and closed-loop cards

The two main types of prepaid cards are open-loop and closed-loop cards. Closed-loop cards are merchant-specific, and

can only be used for transactions at a particular merchant's locations. An open-loop card is associated with and bears the

logo of an electronic payment network, such as Visa. Open-loop cards can be used wherever these networks are

accepted.

Reloadable cards

A reloadable prepaid card is one that allows customers to add funds after their initial purchase. Teen cards, travel cards,

and payroll cards are often reloadable.

Gift cards

These prepaid cards are often non-reloadable, and can be given to purchase gifts until the balance is zero.

Travel cards

Travel cards are an alternative payment method cash and traveler's checks for travelers. Some cards offer lost luggage

reimbursement, emergency card replacement, and zero-liability for lost or stolen cards.

Payroll cards

A payroll card is an alternative to traditional payroll methods in which an employee’s wages are deposited directly to their

card.

Healthcare cards

Healthcare cards are specific types of debit cards that allow customers to access funds in health benefits accounts, such

as Flexible Spending Accounts (FSA) and Health Savings Accounts (HSA). These are typically accounts in which a

portion of an employee’s earnings are set aside to pay for qualified medical expenses, such as doctor visits, over-the-

counter medications and prescriptions. Healthcare cards are similar to debit and credit cards as they deduct funds from

the accounts to which they are attached.

For the purposes of this report, the following timeframes apply:

Review period: 2007–2011

Forecast period: 2012–2016

All data is collected in local currency. To avoid distortions due to currency fluctuations, all conversions into US dollars of

current, historical and forecast data are made with a yearly average exchange rate. All values in tables, with the

exception of compound annual growth rates (CAGR) are displayed to one decimal place. Growth rates may, therefore,

appear inconsistent with absolute values due to this rounding method.

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5.2 About BRICdata

BRICdata publishes in-depth strategic intelligence reports that help its customers better understand opportunities in

emerging markets and industry sectors. Its reports provide an independent, expert view supported by primary research

and access to leading data and intelligence sources.

BRICdata is a comprehensive source of insights and analysis, and publishes a broad range of reports across a number of

different industry sectors, including consumer, retail, financial services, technology, telecoms and construction.

BRICdata is headquartered in London with research, analysis and account management teams based across Europe, the

US and Asia-Pacific. Its global research footprint is supported by a network of external associates, data partners and

industry experts to give the clearest possible perspective on emerging markets.

5.2.1 Areas of expertise

BRICdata operates a dedicated, multilingual team of in-house industry analysts with significant experience of global and

country-level research. BRICdata also maintains data and research partnerships with other research companies, industry

experts and trade associations, along with a network of independent industry consultants and former industry participants

contributing research and reports to bring additional insight and expertise in more specialist areas.

BRICdata’s research offering spans the following industry areas:

Construction BRICdata publishes reports covering the entire construction value chain: construction materials, equipment, construction

services, architectural services and interior design. It also covers the main value sectors of construction activity:

commercial, infrastructure, industrial, institutional and residential.

This comprehensive view of the market enables BRICdata to detail key growth sectors and countries and identify the most

attractive industry opportunities.

Consumer goods Covering a broad range of areas across the consumer goods market, from interior products to fast-moving consumer

goods (FMCG), ingredients, and packaging, BRICdata offers a comprehensive insight into key consumer sectors across

fast-growing markets, identifying key trends, future innovations and growth opportunities.

Comprehensive data sets including unique primary survey-driven research creates accurate market forecasts and

understanding of the factors driving consumption behavior.

Financial services Providing detailed insights into insurance and banking markets, BRICdata’s financial services reports identify key market

opportunities, emerging technologies and channel strategies. The reports provide unique data combined with local

examples of best practice and expert insights into the market.

Retail BRICdata maintains a comprehensive database of forecasts of retail spending, along with a series of unique indicators

enabling a forward view of retailers’ prospects in emerging markets. The reports identify emerging concepts in retail,

including the nascent online and mobile retail sectors in the BRIC countries and other emerging markets.

Technology BRICdata tracks key trends and innovations, emerging technologies and markets, and the key operators in both emerging

markets and technologies. Covering a range of emerging and disruptive technologies including telecoms, social media,

online and mobile retailing, and telemedicine, BRICdata examines strategies for success, the state of the competitive

landscape and the inherent threats and opportunities in the emerging technological economy.

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5.3 Methodology

All BRICdata reports are rigorously sourced and created according to a comprehensive, two-stage methodology. This

includes internal audit and primary research.

A) Internal audit

Review of in-house databases to gather existing data:

o Historic market databases and reports

o Company database

o projects database

B) Primary research

Review of the latest company strategy and asset management trends

1) Research

A. Sources

Collection of the latest market-specific data from a wide variety of industry sources:

o Government statistics

o Industry associations

o Company filings

o Broker reports

o International organizations

B. Expert opinion

Collation of opinion taken from leading industry experts

Analysis of third-party opinion and forecasts:

o Broker reports

o Industry associations

o Official government sources

C. Data consolidation and verification

Consolidation of data and opinion to create historical datasets

Creation of models to benchmark data across sectors and geographies

2) Research Analysis

A. Market forecasts

Feed of forecast data into market models:

o Macroeconomic indicators

o Industry-specific drivers

Analysis of Market Databases to identify trends by sector:

o Latest trends

o Key drivers of the market

3) Report Writing

Analysis of market data

Discussion of company and industry trends and issues

Integration of survey results

Annual review of trends

Standardization of market definitions using recognized industry classifications

4) Quality Control

A. Templates

Detailed process manuals

Standardized report templates and accompanying style guides

Complex forecasting tool used to ensure forecast methodologies are consistently applied

QC checklists

B. QC process

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Peer review

Senior-level QC

Random spot checks on data integrity

Benchmark checks across databases

Market data cross-checked for consistency with accumulated data from company filings

5.4 Disclaimer

All rights reserved.

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means,

electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, BRICdata.

The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the

findings, conclusions and recommendations that BRICdata delivers will be based on information gathered in good faith

from both primary and secondary sources, whose accuracy we are not always in a position to guarantee. BRICdata can,

therefore, accept no liability whatsoever for actions taken based on any information that may subsequently prove to be

incorrect.


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