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pay world
Italy
Uncorked
By Adam Perrotta, Assistant Editor
Since first bearing fruit in the early 2000s, Italy’s prepaid market has matured like a fine
wine, growing more robust and complex over time. Like a good Chianti, Italy’s prepaid success largely is the result of climate and other factors that are uniquely Italian. But, the market offers valuable lessons for stakeholders looking to cultivate prepaid in any environment.
Fertile Ground
The seeds of prepaid were planted in rich soil in Italy. Consumers already were familiar and comfort- able with the prepaid concept, which, since the mid-1990s, had been the dominant format for mobile phone minutes. Italians, historically, also have tended to favor cash and avoid credit, while
a large population of unbanked immigrant workers have served as a natural market for prepaid.
From that fertile ground sprang Poste Italiane’s Postepay GPR
card platform. Launched in 2003, Postepay has become one of the most successful prepaid initiatives in the world. Within five years, more than 3.5 million Visa-branded Postepay cards had been issued and now that number has jumped to more than10 million. The pro- gram’s success has been driven by Italians’ comfort with the postal system (through which many re- ceived government benefits and sent money orders), a distribution channel of 14,000 post office lo- cations and a lower cost compared to traditional banks, which tend to charge high service fees in Italy.
Today, the program is responsible for more than 30 percent of Italian e-commerce transactions.
The success of Postepay was an early milestone in the development of Italy’s prepaid market, providing a foothold and establishing general- use prepaid as a viable product. Following Postepay’s initial suc- cess, several banks—including Che- Banca, Intesa Sanpaolo and UBI Banca—began issuing GPR prod- ucts to reach consumers who’d previously avoided traditional banking services. In the years since, other developments have opened doors for new prepaid verticals, use cases and providers.
Gifting Gets Going
Among the leaders of Italy’s first prepaid wave is Epipoli S.p.A.
A top European prepaid market comes of age.