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Prepaid cards grew 370% last year, driven by minor users between 13 and 24 years old - infobae
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Las tarjetas prepagas crecieron un 370% el año pasado, impulsadas por los usuarios menores entre 13 y 24 años
Cuatro de cada 10 transacciones fueron realizadas por jóvenes y el 38% de las tarjetas prepagas emitidas son virtuales, sus dueños ni siquiera piden el plástico
www.infobae.com
March 19, 2024
Four out of every 10 transactions were carried out by young people and 38% of the prepaid cards issued are virtual, their owners do not even ask for the plastic
By Fernando Meaños
The virtual card is mostly used (52%) for gaming and entertainment purchases
The use of prepaid cards, which drives the use of wallets in Argentina, grew intensely in 2023 based on some key factors, such as the use of virtual versions almost on par with plastic cards and the need for a card for subscription payments (film/TV platforms, gaming, etc.), among other trends. At the same time, the analysis of its use allows us to glimpse the future of payment methods in the country: 4 out of every 10 prepaid card operations were carried out by users under 24 years of age , who thus acquire a habit of paying Quick and simple that surely will not change over time.
Last year, the number of transactions with prepaid cards grew by 161% compared to 2022 and the volume operated with them increased by 370% , well above the 211% inflation rate. Likewise, in 2023, 52% more prepaid cards were issued than in the previous year. The data comes from the GP Insight report for the second half of 2023, prepared by Global Processing, the company that is in charge of 89% of the processing of this segment, with more than 2.7 billion annual transactions.
Source: GP Insight, second half 2023
This information “allows us to anticipate consumption behaviors and dynamics. The fintech ecosystem is constantly evolving and at the forefront of digital payments,” said Patricia Furlong , CEO and president of Global Processing. The company highlights that just as 4 years ago the needs of the pandemic expanded the use of the fintech ecosystem, last year the main driver of growth was the remuneration of virtual accounts , a key help to defend against inflation for many users. .
Going forward, they emphasize some regulatory issues, such as the payment of salaries through CVU accounts (enabled by DNU 70/23) considered another central growth factor for fintech, or interoperability for QR payments with cards, already provided by the Central Bank.
Several important trends emerge from the report:
- Of the total money that circulated through prepaid cards, only 5% corresponds to cash withdrawals from ATMs, while 90% was destined for purchases within the country, and the other 5% for international consumption . In this way, the use of this instrument to make payments and, only as an exception, to obtain cash is consolidated.
- Measured in number of transactions, 97% of them were purchases, and of that total, 34% represents consumption in supermarkets and food stores. This is followed by payments at restaurants and bars, then service stations, and finally contracting services (subscriptions, cable or Internet services, professional services, etc.).
- 40% of prepaid card users belong to Generation Z and Post Z, that is, young people between 13 and 24 years old . Another 30% corresponds to Generation Y, under 45 years of age. And the average ticket grows along with the age of the users. It is clear that the universe of Argentines who grew up with “cash only” is losing space in the hands of “ a generation of digital financial natives ,” explained Furlong.
Source: GP Insight, second half 2023
- In 2023, 38% of the prepaid cards issued were virtual, which shows that the universe of users who do not even want to have plastic and conceive of their card inside their cell phone is growing. With a semi-annual growth of more than 60%, the virtual card is mostly used (52%) for gaming and entertainment purchases. With the physical card, on the other hand, the largest amount of consumption occurs in supermarkets (29%) and restaurants (13%).
- Hand in hand with virtuality, another trend is its use for expenses in the global market. “Like the credit card, it is common for the prepaid card to be used for international purchases. 16% of consumption with prepaid cards are purchases abroad, especially in the gaming and entertainment segment,” said Juan Sebastián Martinez, CBO of the company.
- Although 35% of prepaid card users reside in the Buenos Aires Metropolitan Area (AMBA), a high level of demand was observed in the Pampas area, with 31% of users. In terms of number of users, it is followed by the NOA and NEA regions, while Patagonia and Cuyo are the regions with the fewest users registered in the last year.
