Canadian Prepaid-Sizing Study Shows Bright Future for Open-Loop
Canada’s open-loop prepaid market saw CAD$3.1 billion (US$2.4 billion) in total card loads in 2015, according to a new market-sizing report offering insights into the country’s fast-growing prepaid industry. The study was conducted by Mercator Advisory Group on behalf of the Canadian Prepaid Providers Organization (CPPO), an industry group formed in 2015 to increase awareness and education about open-loop prepaid products in Canada.
GPR products accounted for the lion’s share of total open-loop prepaid loads for the year, at CAD$1.8 billion (US$1.4 billion), followed by open-loop gift cards, at CAD$1.0 billion (US$782 million). The average load onto a consumer-funded prepaid card was CAD$218 (US$171), while corporate-funded cards averaged CAD125 (US$98) per load.
Canada’s prepaid figured are dwarfed by those of the U.S., which saw $264 billion is total loads in 2014, according to Mercator. But the market in Canada is much younger, and is projected to follow trends in the U.S., where open-loop prepaid is the fastest-growing form of electronic payment, the report noted. Already, Canadians report a higher level of satisfaction with reloadable open-loop cards than do Americans, at 73 percent versus 70 percent, according to a separate study. Meanwhile, sectors including payroll and corporate disbursement, government benefits and disaster relief, student cards and employee incentive cards are projected for robust growth in Canada.
“People in the U.S. have used open-loop prepaid cards for more than a decade to reduce debt and better manage their budgets, and we expect Canadians to embrace these products in a similar way,” said Ben Jackson, director, prepaid advisory service, Mercator. “We predict that open-loop prepaid will grow as individuals, businesses and governments use these cards to solve real pain points and increase efficiencies in the Canadian market.”