Pre-paid cards saw the most dynamic growth within financial cards and payments in 2019. The number of pre-paid cards in circulation increased, and as a result, the transaction volume and value experienced very strong growth throughout the year.
The strong growth in open loop cards in 2019 was shaped by the rapid pace of digitalisation of paper meal vouchers into electronic meal cards and the growing importance of mobile wallet payments. Based on estimated 2018 end of year data for electronic meal cards, about 400,000 meal cards were already in circulation, with the potential to reach 1.
Closed loop pre-paid transportation cards are being challenged by the growing penetration of POS terminals on public transportation which enable payment by contactless debit and credit cards (Visa and Mastercard only). July 2019 saw the full launch of contactless payment terminals in Prague’s public transportation system, which is expected to divert a substantial proportion of fares to contactless cards, debit cards in particular.
2019 saw the continued expansion of electronic meal cards by the largest benefit card providers, such as Edenred, Sodexo Pass Ceska Republika and Up Ceska republika. Employers offer traditional paper meal vouchers or electronic meal cards mainly for tax optimisation.
General purpose reloadable pre-paid cards are not very popular in the Czech Republic, especially after the new AML4 Anti Money Laundering Directive, which requires proof of cardholder identity for pre-paid cards with a monthly turnover limit above CZK6,250. However, with Revolut gaining more customers in the Czech Republic, there is some revival in this type of card.
Apart from issuers of employee benefit cards, open loop pre-paid card issuers do not have a strong position in financial cards in the Czech Republic. It is very easy to get a bank account with a free debit card, and due to the loss of anonymity in open loop pre-paid cards as a result of the Anti Money Laundering Directive, there is little advantage seen in having these cards.
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