Why Open-Loop Prepaid Payments in Canada?

Prepaid in Canda has grown into a $4.3B industry in 3 categories: consumer, business, and government. Its growth has come from providing a platform for fintech innovation, a driver of economic efficiencies and an enabler to financial inclusion.

Platform for Innovation

Firms are adding innovative capabilities to traditional prepaid products to create more robust financial service products.

Micro Loans

Trust Builder (proxy credit score)

Insurance Products

Rewards Programs

Personal Financial Management

Peer to Peer Transfers

Economic Savings

Prepaid products serve as an attractive alternative to costly and inefficient cheque-based transactions that rely on manual and resource-intensive processing and reconciliation.

Canadians send over 55.0 M cheques per year, primarily due to the need for administrative processes and a clear audit trail. An estimated $2.9B to $6.5B per year is spent by Canadian businesses for processing cheque-based payments, with the average cost of a cheque issued in Canada standing at $15. Modern prepaid programs provide security and tractability, combining the record keeping rigor of a traditional cheque audit process with a modern, digital payment product.

Businesses

$ 0 M
Total volume of cheques processed annually

+

Government

$ 0 M
Total volume of cheques processed annually
x $ 0
Average cheque processing cost
$ 0 B

Total costs bourn by the Canadian economy from businesses and government cheque use

Prepaid Opportunity

Prepaid can provide businesses with a modernized, traceable, convenient payment method and governments with increased control and visibility, while reducing primary and secondary costs associated with cheques (e.g., processing, reconciliation, mailing, etc.)

Businesses

  • Canadian Financial Institution: Employee incentive card
  • National Retailer: Prepaid consumer rebate solutions

Government

  • Gov. Benefits Disbursements: Prepaid solutions for participants electing not to use direct deposit
  • Emergency Funds: Prepaid offering for displaced families and individuals

The significant costs associated with cheque use demonstrates the opportunity for an alternate payment system to provide a more efficient product; prepaid is positioned to meet many of these challenges.

Financial Inclusion

Prepaid solutions can provide a tool for organizations to deliver financial services to underserved Canadians

Good Funds: Prepaid offers traceable and easily accessible access to funds, increasing accountability and efficiency for the provider and consumer without overdraft fees

Low Fees and Flexible Overlays: Prepaid can offer low fees, with nudges built into products such as recommendations and transaction round-ups promoting positive behavioral changes

Prepaid as a Platform for Financial Products & Services: Prepaid has the potential to provide a platform for related products such as microloans and insurance as individuals use their prepaid transaction account as a first step towards other financial products

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