Canada Prepaid Cards Market – Growth, Trends, COVID-19 Impact and Forecast (2022-2027)

Market Overview

Canadian prepaid segment ranks second among payment methods in terms of percentage of total payment volume growth, boasting a 34.2% payment volume growth between 2015 and 2020. Canadian open-loop prepaid market is about to reach USD 7 billion in 2022, which is an 80% growth in two years. Covid-19 changed 44% of Canadians to change their payment preferences to digital and contactless long-term, and 42% are uncomfortable with handling cash.

There are 90 companies in the prepaid market in Canada in 2021, up 21% from 2020. Companies in the prepaid segment account for 1/6th of all pay techs in Canada, and the majority of those were new FinTech entrants in 2021. Most of the new company launches and innovations are seen in Challenger Bank, Program Manager, and Service Provider segments. Challenger Banks has the highest percentage of the new FinTech entrants. 38% of the Challenger Banks in Canada offer prepaid cards. Out of the total 90 prepaid value chain players, 50% are headquartered in Canada, and 60% of those 50 are based out of Ontario.

Kids/Teen banking is gaining traction in Canada to allow parents to easily give money to their children, track children’s spending, set tasks that need to be completed for earning an allowance, and help kids learn about savings. Real-time/early earnings access continues to grow in Canada and globally by transferring payment to a prepaid card that can be used immediately.

Cryptocurrency marketplaces are launching prepaid cards for easier funding, withdrawing, and spending. Among the many benefits of the growing prepaid industry in Canada, prepaid offers increased financial inclusion to the essential and growing gig economy while also offering more choice and convenience to all Canadians. In support of post-pandemic economic recovery, it is anticipated that prepaid usage will ramp up quickly over the next few years in Canada.

Scope of the Report

Prepaid card is a kind of payment card, one can use to purchase or pay for bills like credit cards or debit cards. Banks, financial institutions, and others issue these cards with loaded funds. Users can make a transaction without having to pay interest in the future. The Canadian prepaid cards market is segmented by offering (general purpose card, gift card, government benefit card, incentive/payroll card, and others), by card type (closed-loop card and open-loop card), and by end-user (retail, corporate, and government).

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Key Market Trends

Emerging Digital Gift Card Solutions Driving the Market

The gift card market in Canada is expected to cross USD 7000 million in 2022 because of the increased popularity of corporate gifting cultures at special events like birthdays, incentives, festivals, and others in Canada and the United States, North America, which contributed to the largest share in 2021. Gift cards have become one of the most lucrative revenue streams for businesses. Gift card technical innovations continue to enable significant sales and income production in businesses.

To support local businesses in Canada and to stimulate spending, which has been affected by the global pandemic, gift card companies are launching innovative programs in Canada. Downtown Sudbury Business Improvement Association (BIA) and Downtown London are also launching gift card programs to encourage consumers to visit and shop in Canada. This will support the growth of the prepaid industry in the future.

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