Prepaid in Canda has grown into a $4.8B 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
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Government
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
