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True North: Canada’s New Prepaid Trade Group

Association spreads awareness, gives growing industry a voice.

By Adam Perrotta, Assistant Editor

CPPO_Logo_smCanada’s leading payments players have formed an industry group to support the fast-paced development of the country’s prepaid sector. The Canadian Prepaid Providers Organization (CPPO) plans to spread awareness and education about prepaid products and serve as the collective voice for the Canadian open-loop prepaid industry.

The nonprofit group is the brainchild of David Eason, chairman of Toronto-based Berkeley Payments Solutions, a prepaid program manager that’s been recognized on the Profit 500 list as one Canada’s fastest-growing companies for the last three years, and Jennifer Tramontana, a native Canadian, who is president and founder of the Fletcher Group, a public relations and marketing agency with a deep payments footprint in the U.S.

eason_davidAlthough the market for network branded prepaid cards in Canada—which has high penetration of bank accounts—is much smaller than that in the U.S., prepaid has carved out a significant foothold in the country. A recent MasterCard Canada study projects consumers will spend a total of CA$4.9 billion via prepaid cards this year. Prepaid’s rising popularity in Canada, along with the country’s unique regulatory environment (particularly for corporate payments products) and consumer demands, led Eason and Tramontana to decide the time was right for a prepaid association focused solely on Canada.

tramontana_jennifer“Prepaid is growing in terms of market entrants and product offerings in Canada, but overall it’s still viewed as a new and niche product,” Eason says. “The CPPO aims to educate Canadian consumers, businesses and other parties interested in the products, and position prepaid cards in a way that new constituents will become increasingly aware of them.” By following the prepaid boom in the U.S. and Europe, the association has the benefit of learning from the other trade associations and from the regulatory actions that have affected the industry there, he adds.

The Members SpeakThe CPPO’s membership roster includes many of the most important players in Canada’s prepaid industry, including program managers, issuing banks and payment networks—all working together to spread awareness about the benefits of open-loop prepaid and help the industry reach its full potential. A couple of members spoke with Paybefore about the milestone moment for Canadian prepaid.mctague_tom“It’s our goal to work with other members to maintain high standards of conduct and deliver significant value to consumers, businesses and government. Also, as a technology company with a leadership position in payments around the globe, we’re always interested in working with like-minded partners who share the goal of delivering innovation and value to all stakeholders. Open-loop prepaid creates endless opportunities for consumers of all backgrounds and economic status to participate in global commerce; for businesses to improve customer relationships, improve efficiency and reduce risk; and for governments to securely deliver payments to constituents. The CPPO brings together companies that represent the highest standards in the industry to create a voice and platform to share information and create a positive example.”

—Tom McTague, vice president, prepaid, MasterCard Canada

read_peter“Peoples Trust—through its subsidiary Peoples Card Services—was one of the earliest issuers of open-loop prepaid products in Canada and has witnessed firsthand some of the growing pains. Considering the significant growth of these ubiquitous payment products over the past 10 years and an ever increasing demand as Canadians recognize the benefits, Peoples welcomes the inception of the CPPO. With the founding members’ depth of knowledge and the commitment to consumer protection, Peoples Trust is proud to be a member. We look forward to the CPPO becoming a go-to resource helping to educate consumers and stakeholders alike, not only on the vast array of open-loop prepaid product uses, but also the best practices to embrace.”

—Peter Read, president, Peoples Card Services

Getting to Work

Eason and Tramontana began reaching out to contacts throughout the Canadian prepaid industry and quickly racked up a list of major players as supporters. The CPPO officially launched in January 2015, with an impressive membership roster, including nearly all major prepaid issuing banks and program managers in the Canadian market, such as InComm, Royal Bank of Canada (RBC), Scotiabank, Bank of Montreal, Peoples Trust, Home Trust and Berkeley Payment Solutions. Additionally, membership includes payments networks American Express and MasterCard.

Eason serves as CPPO chairman and Tramontana is executive director and communications principal. Education and outreach are the group’s top initial priorities.

“In many ways, Canada mimics where the U.S. prepaid market was several years ago,” Tramontana notes. “There is a general lack of awareness about the products, how they work and their benefits.” Although six in 10 Canadians are aware of network branded prepaid cards, just 29 percent actually have used one, according to a study CPPO just completed. “We have a great opportunity to help shape a successful future for prepaid in Canada by getting ahead of the curve with education and information to help ensure that Canadian consumers have a positive experience with the products.”

The CPPO will implement a national PR and marketing program and conduct research. Education and promotional efforts will extend beyond consumers to companies—foreign and domestic—looking to enter the prepaid market in Canada.

“Whether you are a government, a business or a consumer, prepaid can make financial management easier and less expensive,” Tramontana says. “That’s a message that resonates no matter where you live. We just need to go tell it.”

Charting the Course

With new federal prepaid regulations in effect as of May 1, 2014, and the government mulling further consumer financial protections, regulations are top of mind for Canadian prepaid businesses. The CPPO currently has no government relations function—though it will provide resources and information to any interested stakeholder if requested. The CPPO also hopes to be a guide for firms navigating the Canadian market.

Several CPPO members also are members of the NBPCA, and the groups may collaborate in the future. The CPPO also may work with similar organizations in other countries. “We look forward to joining forces with the other associations that do such great work on behalf of the prepaid and payments industry,” says Eason. “We are excited to contribute to and learn from their success.”


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