An estimated 10 to 20 percent of Canadians are either unbanked or underbanked, meaning they have limited access to everyday banking service. Instead, payments are commonly received via paper cheques that can be lost, stolen or require high fees to be cashed or deposited. These individuals – often our country’s most vulnerable – could be receiving payments faster and more securely through prepaid disbursements.
On May 6th, we released a white paper examining opportunities for Canadians to receive government benefits and tax refunds faster and more securely.
The white paper, Modernizing Canadian Government Benefits and Tax Refund Delivery, highlights why prepaid solutions are needed to offer modernized, digital-first government payments to Canadians. It also provides insights into other countries that have already recognized the value of using prepaid as a key tool to deliver emergency relief and other benefits, including the U.S. and the UK.
“We commend the Government of Canada for its economic response to support Canadians and businesses facing hardship as a result of the pandemic. While great progress has been made in getting money into the hands of Canadians faster, there is still work to be done,” said CPPO Executive Director Jennifer Tramontana. “We believe the wider use of prepaid solutions for government disbursements can improve efficiency in government operations by reducing the use of paper cheques while also delivering better service to Canadians.”
The government recognized that as Canadians’ preference for digital payments continued to increase through 2020, methods of paying or reimbursing Canadians must also adapt. As such the government created a request for information process to examine using alternative, digital payment solutions to eliminate paper cheques. During 2019, the Canadian government issued more than 30 million cheques to disburse funds to citizens and business, but this led to more than 800,000 unclaimed cheque payments for an outstanding value of $370 million.
As Canadian government agencies work to modernize payment delivery, the CPPO continues to provide data-based education on the benefits of prepaid to support wider financial access to all Canadians. Prepaid disbursements provide a high degree of security, flexibility and functionality while enhancing the timeliness of payments delivery.
The CPPO’s report explores:
- How prepaid products can be tailored to the specific requirements of government programs
- How and why prepaid cards offer more controls and rapid access to funds
- How prepaid is the gateway for financial inclusion serving the most vulnerable segments of society
- Five use cases for how prepaid is innovating government payment disbursement
- How Canada stacks up against other countries in the race to adopt prepaid solutions for delivering government relief payments
Get a copy of the white paper here.