MANILA, Philippines - Global payments technology giant Visa believes there will be "explosive growth" in prepaid cards in the Philippines.
Iain Jamieson, Visa country manager for the Philippines, sees a lot of opportunities in the country, noting that there are still millions of Filipinos who do not have any credit cards, debit cards or prepaid cards.
"In the Philippines, in terms of credit cards, around 2.5 million have credit cards but there are 100 million people. Another 2.5 million have debit cards, and if you add up all the ATM cards, etc, only around 25 million have some kind of plastic, so there's a huge opportunity here," he said in a press conference on Friday.
The signs of strong growth in credit spend in the Philippines is also encouraging. Jamieson said Philippine spend grew by double-digit in 2012, and debit and prepaid card spend grew by 25%.
Jamieson noted there was 80% growth in prepaid cards last year. "The projections for prepaid are enormous. They are going to be multiple double-digits," he said.
This is perhaps why Visa is hoping to further push prepaid cards in the Philippine market.
A prepaid card is a reloadable card which allows the user to pay for purchases in any establishment, which in this case accepts Visa.
"In Southeast Asia, the Philippines is my first priority in growing prepaid," Scott Salmon, head of prepaid products for Visa's Asia Pacific, Central Europe, Middle East & Africa, said in a press conference.
Salmon estimated there is a $44 billion "prepaid cardable opportunity" in the Philippines.
"One of the reasons we're so bullish about prepaid is that the stars are aligning with prepaid in the Philippines. The government is supportive. People generally understand prepaid and we have banks and partner organizations that are actively engaging in prepaid. What that tells me is that the Philippines represents one of the next explosive areas for growth for prepaid," Salmon said.
Remittances, gov't disbursements
There are many different types of prepaid cards which can be introduced in the country, such as those to be used for remittances, government disbursements, payroll, travel and corporate.
Because of the billions in overseas remittances sent to the Philippines every year, Visa sees a significant market for the "remittance prepaid card."
Visa has partnered with Union Bank and Western Union for the Gold Prepaid Card. This gives recipients of overseas remittances an option to load all or part of their inward remittance onto the prepaid card.
"When they go to Western Union, instead of handling cash, it will go to the card... The Philippines is a showcase. We did it first here and we expect this would be emulated in other markets," Salmon said.
Another area of opportunity is in government disbursements. Instead of cash, the government can give citizens these cards preloaded with disaster relief funds. Salmon noted this is not only safer and more efficient but is also a way to provide basic banking access to more Filipinos.
An example is the Pag-IBIG Citi Prepaid Card, powered by Visa, which can be used for the disbursement of loan proceeds.
"There are 10 million Pag-IBIG members, and I'm not saying all of them will get the prepaid card. They can still get a check or Landbank ATM card if they want. But it has benfits to the card, like discounts at bookstores, drugstores, Abenson's and perks that you won't get if you get a Landbank ATM or check," Jamieson said.
(Correction: An earlier version of the story referred to prepaid cards as "stored value cards." It has been corrected to "reloadable cards".)