The use of pre-paid and virtual cards in developing countries While all of the above factors contribute to the appeal of virtual and pre-paid cards in Africa and other parts of the developing world, they also offer customers in these regions a number of other distinct advantages that may not be as pressing elsewhere on the planet. Firstly, it should be understood that Africa (with the possible exceptions of South Africa and Nigeria) contains some of the world’s most under-banked countries. This means that banking facilities and payment options that are taken for granted in the developed world are not available in many African states. Even the simple fact of having a bank account is beyond the reach of many. This has therefore hitherto locked these consumers out of many growing and vibrant markets. However, the introduction of pre-paid and virtual cards to Africa has meant that online businesses have been able to open new markets, while consumers now have choice in a way that they never have before. A virtual or pre-paid card can be issued without the credit history or the other financial documentation required by a conventional credit card and so anyone can obtain one, even if they don’t have a bank account. Being able to do business and or make purchases without the need for carrying cash also has great appeal for both business people and customers alike in Africa, where security is for some a significant concern, while at the same time the pre-paid element of these cards means that even if stolen, customers are at far less risk of losing significant sums of money. Allied to this is that some pre-paid cards are single use and can’t be re-used or have additional funds added to them and so this too reduces the risk of fraud and identity theft.
Take up of prepaid and virtual cards in Africa
There would appear to be a direct correlation between the uptake of virtual and pre-paid cards in Africa and the exponential growth in mobile phone use across the continent. This growth in mobile phone ownership and use has been widespread across all age groups and genders, and this has opened up any number of markets where this technology is being used to facilitate payments, purchases and other financial transactions.
Mobile technology has essentially changed the way many people do business in many parts of Africa, and so financial products have evolved accordingly, and this goes a long way to explaining the rapid growth in the use of a variety of pre-paid payment methods. Essentially, for many Africans, their mobile phone is now becoming their wallet as well. For instance, many small businesses across Africa are mobile entities without stable or secure premises, and so these have until now lacked the resources and technology to be able to process payments using methods other than cash. However, virtual and pre-paid card accounts that can be operated via mobile phone has seen a whole new range of virtual payment solutions come onto the market that allow even the smallest business to process digital, online payments via mobile technology. As a result, the increasing number of African merchants and service providers now offering their goods and products in this way has in turn encouraged the further take up of virtual and pre-paid cards as people have begun to see their more widespread acceptance. The rapid boom in mobile phone use has also seen the market for apps, games and other online products increase. Many African mobile device users were previously unable to take full advantage of the technology because they did not have the means to make online purchases of apps. However, virtual and pre-paid cards have changed this, so that apps and games are much more accessible to all mobile users right across the continent, and this is a market that can expect to see continued significant and rapid growth in the coming years. Pre-paid payment methods in other online industries The adoption of pre-paid cards across Africa, combined with enhanced mobile technology and take up, may opened up other markets not least in the recreational space. For instance, across Europe online casinos and sports books now accept a range of virtual and pre-paid cards, with brands like EntroPay now being accepted by a variety of leading names in this space. As more and more entertainment delivery shifts online, it is to be expected that in developing countries, pre-paid and virtual cards will become the dominant payment method for these services, while the increased use of pre-paid cards as gifts is also expected to rise as this market grows. There are also a number of more practical applications in Africa. For instance, virtual and pre-paid cards are increasingly used to pay the wages of seasonal or temporary employees who may not have bank accounts, thereby eliminating the need to deal in cash. Likewise, some financial institutions now offer pre-paid cards that are designed specifically to provide rewards and incentives for employees. As technology develops across the continent, and as more business in Africa is conducted online, the need for safe and secure payment methods that are nevertheless accessible to those without bank accounts or credit histories will grow, and virtual and pre-paid cards are unquestionably in the vanguard of this rapidly expanding market.]]>
