New use cases are always emerging for prepaid, including crypto rewards and BNPL, says Karen Budahazy, VP of Digital Enablement and Issuing for Peoples group. These are just a few of the many topics being discussed at the 2022 CPPO Prepaid Symposium on June 1 at the Toronto Region Board of Trade.
At the Symposium, Budahazy is also moderating on prepaid and employee/worker engagement and how to reduce attrition and drive loyalty. To kickstart that conversation, we sat down with Budahazy to learn what opportunities exist to continue prepaid’s massive market growth, learn what services are being most impacted by prepaid, and get her insights on what the next five years look like for prepaid innovation. Get her take in our interview below.
What do you think is the biggest force propelling the prepaid market’s growth today?
Budahazy: The push for going cashless in favour of a digital payments society is a strong force propelling the prepaid market’s growth today. The COVID-19 pandemic created this title wave in eCommerce adoption in Canada, which overshadowed its natural gains. Prepaid is the highest growing digital payment segment replacing cheques and cash as a result.
What’s one product or service that prepaid is impacting today that isn’t getting enough attention in the payments industry?
Budahazy: Prepaid plays an important role in providing access to financial services for communities in need and those that are hard to reach. First Nations communities are a great example where bank like services is being provided using prepaid products and enables cardholders to make purchases in-store or online, receive funds faster — including Government disbursements — through direct deposit, pay bills and much more. Financial inclusion is a necessity today and prepaid is a perfect vehicle to ensure every Canadian has access.
What’s the biggest prepaid innovation use case you’re seeing today?
Budahazy: New use cases for prepaid are always emerging, but I think two that stands out are:
1. Cryptocurrencies: While cryptocurrencies have become more mainstream, they remain extremely volatile. One way to get into this space is to earn crypto rewards every time you spend money using your prepaid card. Another challenge with cryptocurrencies that prepaid solves is liquidity. A prepaid card enables you to convert your crypto to fiat so that it can be used to make everyday purchases.
2. Buy-Now-Pay-Later (BNPL): While this use case has traditionally been part of the shopper ecosystem in the form of layaways, BNPL has transformed shopper behavior and is using prepaid as the foundation to facilitate the purchase behind the scenes. BNPL allows consumers to budget and make purchases of any size and enables retailers to thrive during these uncertain times. The bottom line is that prepaid gives consumers more choice in how and when they want to pay.
What’s next for prepaid innovation over the next 1-5 years?
Budahazy: The next 5 years will be very exciting for prepaid in Canada. With payments modernization and open banking around the corner, more opportunities will open up for prepaid to play a role. I see market segments such as SMBs and government disbursements being prime targets where prepaid can make an impact with solutions that deliver international remittances, safe transfer of funds, and ease and speed of use to the marketplace.