Growing demand for prepaid products of all types in Canada helped drive Vancouver-based issuer Peoples Trust to add 150 new programs in 2015, and led to a 19 percent increase in the bank’s overall prepaid load volume, to CAN$1.2 billion (US$870 million), for the year. Demand for prepaid is ramping up across sectors, Peter Read, president of Peoples Trust subsidiary Peoples Card Services, tells Pay News. Consumer-focused products like GPR, reward and gift cards are benefiting from increased awareness, enthusiasm from millennials and mobile payments services that incorporate prepaid. Meanwhile, companies are using prepaid to fulfill needs including corporate expenses, business incentive and B2B payments, Read notes. Many U.S.-based providers of corporate-focused prepaid programs have established operations in Canada to serve client companies that have operations in both countries, he adds.
“The growth of prepaid in Canada has been pretty phenomenal. Transaction volumes are up 30 percent over the past three to four years, and there’s a lot of potential growth still to come,” Read says. Regulations that took effect in 2014 placed new requirements on Canadian prepaid products, including rules on maintenance fees that some industry observers felt could prove challenging—but Read says federal and provincial officials “have not taken an adversarial stance” toward prepaid. And while he predicts future regulation, including increased AML controls, is forthcoming, “we welcome those regulations, and we think they’re important,” he says.
Last year, a consortium of Canada’s leading prepaid stakeholders, including Peoples Trust, banded together to launch the Canadian Prepaid Providers Organization (CPPO), an industry group with the goal of spreading awareness and education about open-loop prepaid products and serving as the collective voice for the Canadian prepaid industry. Read says the CPPO is ramping up its outreach and education efforts and soon will release a comprehensive study on the size of Canada’s prepaid market.
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