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The Growth of Prepaid Markets

Over the past few years, you may have heard some chatter about the growth and popularity of the prepaid payment cards in Canada. It’s not surprising.

According to a study released in 2015, by the Canadian Prepaid Providers Organization (CPPO), open-loop prepaid card market has reached 3.1 billion in total dollars loaded onto cards in Canada. This is expected to continue to rise and become the fastest growing form of electronic payments. Similarly, our transaction volume supports this trend and we’ve seen most of the growth in prepaid come from prepaid payment products.

Prepaid payment products are made up by a number of cards and vouchers, each having a different use:

  • Prepaid Visa & MasterCard - Open-Loop card that is issues with a set value and can be redeemed at millions of retailers nationwide that accept Visa & MasterCard.  Popular for gifting for any occasion
  • General Purpose Reloadable Cards (GPR)- Open-Loop cards are issued with an initial load and upon registration, can be reloaded. GPR cards can be used online and in store, wherever Visa & MasterCard are accepted.  They are an ideal solution for the under-banked, the security conscience and for millennials who prefer not to carry a traditional credit card.
  • Payment Vouchers - provide those consumers who prefer not to use their own credit card with an alternate method to purchase products or services online.  Payment Vouchers can only be redeemed at online retailers that accept the voucher as a method of payment.

So, it is not surprising that the growth of the prepaid payment products have risen, as  I have seen the progress firsthand since their inception. For example, within a year of introducing "Prepaid Payment" category in 2010, it made up about 19% of total prepaid sales in retail.  Today, it is over 60% of total prepaid sales in retail and that number is growing.   

C-store Operators should take advantage of this rising multi billion-dollar prepaid market opportunity. With consumer adoption growing, those retailers who offer prepaid cards in store will not only benefit from the repeat foot traffic to their location, but generate new revenue opportunities by keeping up with the new and emerging products that are available to consumers.

How can C-store operators maximize the opportunity? First step is to ensure they have the proper merchandising rack/solution in store. The second step is to ensure their merchandising rack is placed in high traffic areas and that the rack is fully stocked. Prepaid products offer consumers with many benefits and a variety of different use cases. Offering a prepaid program in your store ensures consumers have easy access to these products,  whenever they need them, making your location a destination centre.

Prepaid products will continue to evolve year over year.  Either through the introduction of new products and services or in the way in which products will be delivered, retailers will need to keep up with these changes. For example, over time - we will start to see growth in the adoption of virtual gift cards.  Consumers will need the ability to fund mobile wallets and reload products in retailers. By adopting a prepaid program, C-Store Operators open themselves up to endless opportunities for prepaid products.  

We at Payment Source specialize in Prepaid Products and services to more than 15,000 retailers across Canada. If you are interested in growing your business and would like to learn more about our innovative technology than contact us today to find the right prepaid offering that will fit your business needs.

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