Canadians are increasingly adopting prepaid cards as a tool to help them manage their finances. The Canadian Prepaid Providers Organization (CPPO) recently released its second annual benchmark study, entitled Canadian Open-Loop Prepaid Market: 2016 that shows 17 percent growth of the open-loop prepaid card market in Canada between 2015 and 2016.
The CPPO study revealed that Canadians loaded CAD$1.8 billion on general-purpose reloadable (GPR) cards in 2016. GPR cards are purchased by a consumer for his/her personal use to pay for purchases, pay bills and access cash at ATMs. The cards are not connected to a bank account, are safer than cash and cheques, and offer a secure way to shop online without revealing confidential information. They can be used online and in-store and are an ideal solution for the underbanked, the security conscience and for millennials who prefer not to carry a traditional credit card.
Most GPR products in Canada can be “topped up” on the Loadhub platform, including: Canada Post Reloadable Visa, Mastercard Cash Passport, PIVOT Prepaid Visa Card, Mogo Spending Account and Zoompass. Loadhub uses Quick Response (QR) barcode technology integrated with Canada Post’s point-of-sale system, allowing cardholders to receive payments, deposit funds, or reload cards at more than 6,000 locations across Canada.
The rise of the Canadian prepaid market reveals that Canadians are using alternative financial solutions to help them manage their finances, reduce their debt and conduct online commerce more securely. As Canadians continue to adjust their financial toolbox to manage their growing debt, many will embrace the ubiquitous prepaid card as their go-to payments solution, or as a supplement to their bank account.
About the Author: David is the former founder, CEO and Chairman of Berkeley Payment Solutions. He holds a wealth of business and financial services experience having served within American Express Global Corporate Client Group, Deloitte’s financial services strategy practice, and the investment management department at Canada Trust. Currently, David is the Chairman of the Canadian Prepaid Providers Organization.