Picture this scenario – a collections agency appointed by a lender has hired 1000+ feet-on-street (FOS) workforce to facilitate collections from delinquent customers. The dilemma in front of the agency is that almost 60% of these FOS contract workers don’t have a formal savings bank account. How do you manage to pay their salaries? 

In recent times we have witnessed the rise of the gig economy which consists of consultants, freelancers and  blue collared workforce. As per a NITI Aayog report, in India, the gig workforce is expected to expand to 2.35 crore workers by 2029-30. According to Statista’s 2021 report, India has the second largest unbanked population in the world at a staggering 20% of the population. The above facts and figures coupled together provide a massive opportunity for financial inclusion, perhaps one of the reasons why India has seen green shoots in the Fintech sector, which at large, is trying to solve for the financial inclusion of the new to bank & new to credit base of the population.

The answer to the above challenges lies in a payroll card. Payroll cards are prepaid cards that employers use to load an employee’s salary or wages in lieu of a formal cheque. The funds are distributed each payday, providing an alternative to direct deposit for those who cannot or will not hold a traditional account. Payroll cards are always reloadable, which means a worker uses the same card all the time instead of being issued a new card each payday.

Employees can conveniently access their wages with this setup without the need to maintain an account with a financial institution. They can receive their funds instantly, sometimes up to 48 hours early, depending on the issuer of the card.  They don’t need to worry about carrying large sums of cash to purchase necessary items. This also helps enterprises and MSMEs to promote digitisation of payments in-line with the government’s Digital India mission. 

The Pros and Cons of Payroll cards

As with any system of compensation, organisations and employees need to be aware of the  pros and cons of payroll cards before using or implementing this type of system. Here are the crucial points to consider:

Benefits of Payroll cards:

Challenges of Payroll cards:

In conclusion, Payroll cards become the logical choice for enterprises and corporations who have a sizable workforce new to the financial ecosystem. They are easy to issue, can be modularized as per the requirements of the enterprise and help in fund management both for the employees and the employer. This can also become an alternate revenue channel for enterprises.

At CARD91, we offer a flexible, robust & scalable full- stack card issuance platform. We work closely with Fintechs & enterprises to help them launch new age card programs in the shortest possible turnaround time (TAT) supporting multiple use cases such as Expense Management & corporate cards, and Payroll Cards to name a few. Our platform is agile which helps us stitch together a custom card program as per the needs of the client. 

Still struggling with employee & vendor payouts? Get in touch with sales@card91.io to understand how we can help you transform your payouts to your employees & vendors.

Authored by Bhushan Sawant, Director, Sales & Partnership

Introduction:

Prepaid cards have experienced a remarkable transformation over the past few decades, emerging as a powerful tool in the financial landscape. Originally introduced as a convenient means for gifting and travel, these cards have evolved with advancements in technology to meet the changing consumer needs.

Prepaid Cards in India:

In India, prepaid cards have had a significant rise in popularity due to their numerous benefits. Initially embraced as a safe and convenient alternative to carrying cash, these cards quickly became prevalent in various sectors, from retail and transportation to online shopping. Their proliferation was further accelerated by the expansion of the country’s digital infrastructure.

One pivotal moment in the evolution of prepaid cards in India was the advent of e-commerce and the widespread adoption of mobile wallets. Leading banks and fintech companies integrated prepaid cards into their mobile applications, enabling users to make quick and secure digital transactions. This integration propelled prepaid cards into the forefront of India’s burgeoning digital payment ecosystem.

The Indian government also played a crucial role in promoting prepaid cards to drive financial inclusion. Millions of unbanked and underbanked individuals gained access to digital financial services by advocating for their adoption in government schemes and benefits disbursement. Prepaid cards became a gateway to the formal banking system, empowering individuals previously excluded from traditional financial services.

Prepaid Cards on the Global Stage:

The transformation of prepaid cards is not limited to India alone; it has reverberated globally. Prepaid cards have become an integral part of the financial landscape in many countries, catering to a diverse range of consumer needs. They have emerged as an alternative to traditional bank accounts for the unbanked and underbanked population, providing access to vital financial services.

The rapid growth of e-commerce and the increasing demand for seamless digital transactions have fueled the global adoption of prepaid cards. Payment processors and fintech companies have collaborated to issue virtual prepaid cards, making online shopping more accessible and secure for consumers worldwide. These cards have played a pivotal role in bridging the gap between individuals and the digital economy.

Another significant application of prepaid cards globally is in the travel industry. Prepaid travel cards have become the preferred choice for international travellers, offering favourable exchange rates and enhanced security. They provide a practical alternative to carrying foreign currency, enabling travellers to make hassle-free transactions.

Expanding Functionality and Rewards:

Today, prepaid cards have expanded their functionalities beyond basic transactions to address evolving consumer preferences. Many prepaid cards now incorporate rewards programs, cashback offers, and other loyalty benefits. These additional features aim to attract and retain users, fostering a sense of value and engagement.

Conclusion:

The evolution of prepaid cards in India and globally has been transformative, empowering financial inclusion and enabling seamless digital transactions.

As prepaid cards continue to adapt to changing consumer preferences and technological advancements, they are poised to play an increasingly significant role in shaping the future of the financial landscape. With their convenience, security, and versatile functionalities, prepaid cards will continue empowering individuals and businesses alike, fostering financial inclusion and contributing to the growth of the digital economy.

Card91 presents a diverse collection of prepaid cards, catering to both domestic and international transactions, accompanied by a convenient switch system. Our integrated solutions empower businesses and authorised dealers with effortless operations, facilitating a wide range of applications. To gain a deeper understanding of our innovative solution, please contact us at sales@card91.io. Our team will be delighted to assist you and explore how our offerings can cater to your specific requirements.

Let’s unlock new possibilities together!

-Written By Khushboo Bakhru, Partnership & Sales

After reading Amit’s blogpost that projects a whopping doubling of the credit card customer base within the next 4 years, I could not help but wonder which is the major segment of India’s population that could qualify as “The Aspirational Indians”. It didn’t take me a lot of effort. With the cues that the economic growth of India is throwing at us – premiumisation trend, luxury / revenge travel, rising number of entrepreneurs, etc. – I could easily conclude that it’s the Gen-Z that’s driving credit card growth.

Okay, now how do you lure this class of potential credit card customers? I remember students of top B-schools getting free credit cards from established issuers. But what about the rest of the young aspirationals? We all know there’s enough competition with some legacy Issuers who’ve got the proverbial “first-mover advantage”, but that also implies they’ve got the legacy systems! How can the next generation of Issuers work using first principles and craft a lean and superior product? We, at CARD91, will surely answer this question in the next few days to come ☺

However, for now, let’s just focus on the specific preferences, lifestyle, and spending habits of this demographic. Here are some features that I felt could be appealing:

Instant Card Issuance:

Millennials hate to wait! If an Issuer imbibes this core principle, a major advantage over legacy Issuers is already gained. Quick and easy application processes with instant card issuance for immediate use are absolutely non-negotiable for Gen Z.

Credit Card on UPI:

Although one may be new to credit card, UPI is omnipresent now! Gen Z is pretty familiar and comfortable using UPI and therefore, this is one of the must-have features to capture the market especially when the legacy issuers are still struggling to make it functional.

Reward Programs for Online Shopping, Food Delivery, Dining, and Entertainment:

Tailored rewards or cashback for online shopping on popular e-commerce platforms, special discounts on food delivery services or dining at partnered restaurants, and exclusive access to movie theatres, streaming services, music subscriptions, and live events are a must have!

Low Forex Markup for International Travel:

Unlike the previous generations, Gen Z is more keen to discover the world from an early age. Since it may still not be earning much, a LOW / ZERO FX mark-up feature on credit cards is surely a hotseller!

Travel Rewards for International or Domestic Trips:

Millennials are explorers in the true sense – domestic or international travel is always on their mind, and on the cards 🙂. Travel-related benefits such as discounts on domestic flights, hotel bookings, or holiday packages within India, exclusive lounge access, and waiver on fuel surcharge are needed in every credit card targeted at this generation.

Local Lifestyle Perks:

Millennials consider work-life balance very important in their overall well-being and are spoilt for choices when it comes to including “life” in their lifestyle! An Issuer must get into partnerships with local brands, gyms, spas, or wellness services to provide discounts or exclusive offers.

Financial Management Tools:

Millennials are eager to learn about building a large corpus. Budgeting features, spending insights, and real-time notifications to help cardholders manage their finances effectively can be a good attraction. An educational initiative on how to get maximum benefit from a credit card by being a transactor can help. Also, a tie-up with any personal finance assistant offering discounted or complimentary services is a plus point.

Customized Offers:

Millennials love personalized experiences! AI-led tailored promotions and discounts based on spending patterns and preferences can be a good draw.

Gamified Rewards:

Accelerated rewards with increasing spends and other milestones can hold this generation’s interest and drive higher card usage.

Language and Regional Support:

Although we are a large, English speaking nation, there’s an even larger chunk of population (Gen Z included) that still prefers Hindi or a local language. To create that “wow” factor, the Issuer can offer customer service and mobile app interfaces that support multiple languages and cater to regional preferences. 

Student-focused Features:

Career development is an important focus area for this generation. The Issuer that can give access to online courses, career-building resources, student discounts, or networking events to support professional growth will surely have an edge over others.

Flexible Credit Limits:

Millennials are either yet to start their professional journey or are in a very early stage. Cards that allow for flexible credit limits based on income and spending habits, giving users more control, are certainly more acceptable.

Green Initiatives:

With the increasing exposure to sustainability initiatives in academic institutions over the last few years, even my daughter teaches a lesson or two to me! Issuers offering cards manufactured in an eco-friendly manner or those with features that contribute to environmental causes will be able to emotionally connect with Gen Z millennials!

Collaborations with Local Influencers:

This generation has a far more extensive online social presence than physical presence. Partnering with popular local influencers or celebrities who are active online for exclusive offers and promotions can drive higher card usage.

Understanding the local culture, preferences, and the unique challenges faced by millennials in India is crucial to design the right credit card product that resonates with this demography. Additionally, keeping up with the rapidly evolving digital landscape and incorporating technology-driven solutions will likely appeal to the tech-savvy nature of millennials.

If you’re an Issuer, no time better than the present to launch a credit card product for this generation. 

Authored by Shailabh Kothari, Director – Sales and Alliances at CARD91