Sydney, 8 September 2010: With the annual growth rate for prepaid cards expected to eclipse 20 percent1 in the next couple of years, Citi today announced further inroads into Australia's fastest growing payments segment with the launch of a consumer application for customers.
In January this year, Citi - one of the largest global providers of corporate prepaid solutions - started providing its customised payment platform to Australian corporate clients, through its business known as Global Transactions Services (GTS).
With a leading presence now established in the Australian corporate sector, Citi's GTS team, in partnership with Citibank, is using its expertise and existing platform to offer a Citi Prepaid Gift Card as a reward item for Citibank's credit card customers who want to redeem their points for a prepaid card. Customers will be able to use the card wherever MasterCard is accepted.
Citi Prepaid Services
Globally, Citi has been quick to identify the growth opportunities offered by prepaid cards. In 2007 the company purchased a major U.S. prepaid card issuer E-Count (now known as Citi Prepaid Services) which provided a platform for scale and the roll-out of both Citi branded and white-labelled prepaid products and services to other countries2.
Head of GTS, Derek Syme said Citi had an unmatched global footprint in the prepaid space and was the only provider with the infrastructure to issue cards globally. "Citi has helped shape the prepaid industry overseas, and now we're doing the same in Australia.
"As a global bank, we have leveraged all the supporting structures from our GTS business in the U.S. to generate economies of scale - leading to lower costs for us, and ultimately, savings for our clients.
"The growth of our corporate solution in Australia has been twice as fast as expected. The next step in our evolution is the consumer application for Citibank customers but we are also working on a number of other 'business to employee' and 'business to business' applications."
Gift cards as a rewards item
Research conducted by Citi shows that gift cards are one of the most popular and recognised rewards items available. When people were asked to name three products or offers available through their credit card rewards program, more than 1 in 2 (54 percent) said 'gift cards' - the highest response provided3.
Head of Credit Cards, Madeline O'Connor said current penetration levels were still pretty low so there was a lot of growth opportunity ahead. "Prepaid cards are considered the fastest growing payment platform in the world and with more than 300,000 people currently enrolled in Citibank's rewards program, the potential for take-up is strong as our Cards market share grows beyond 10 percent".
"At the moment we are testing the waters with our initial redemption offer but there are many more consumer applications for prepaid cards. For us, the obvious next steps are to replicate the process for our partners, including Virgin Money, and secondly, to develop a reloadable capability for foreign exchange and general purpose prepaid cards."
The redemption rate of Citi's Prepaid Gift Card compares very favourably with other store cards and cashback.
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