Banks in India are considering issuing network-branded open-loop prepaid cards in the face of declining credit card transaction volumes, local newspaper Daily News & Analysis reports.
The newspaper cited sources at Hyderabad-based Andhra Bank, Mumbai-based Bank of India and Barclays India who confirmed that their respective institutions were planning to offer open-loop prepaid cards. Open-loop cards are supported by a retail electronic payments network brand such as Visa, Visa Electron, MasterCard or Maestro and can be used anywhere the brand is accepted.
An official at the Bank of India confirms to PaymentsSource it is in the advanced stages of rolling out an open-loop prepaid card, and Mumbai-based Punjab National Bank says it is in the planning stages to launch one. Officials at Barclays and Andhra Bank did not respond to requests for comments by deadline.
Mrinalini Manral, an analyst with Mumbai-based Dassler Business Intelligence, tells PaymentsSource open-loop prepaid cards provide banks with a convenient way to support consumers in outlying areas.
“They can increase a bank’s user base by a huge number given that prepaid cards do not need a credit report to qualify,” she adds. “Plus these cards do not come with problems associated with credit and debit cards, especially fraud.”