Since 2004, the author has been measuring the size of the prepaid market in the United States. Early in 2016, the Canadian Prepaid Providers Organization (CPPO) asked the author to bring their benchmarking process to the Canadian open-loop prepaid market. Working with the CPPO and Canadian issuers, the author created the taxonomy shown in the exhibit below for measuring the Canadian open-loop prepaid market. This benchmark identifies opportunities, according to the latest research, The Canadian Open-Loop Prepaid Market: 2016.
This taxonomy formed the basis of the survey that we sent to issuers and program managers. Three categories define the market more broadly than in the U.S. benchmark, both because the Canadian market is different and smaller than the U.S. market and to facilitate confidential reporting. Since this is just the second year of benchmarking the Canadian market, the taxonomy may evolve as new categories become active and new information is made available from one year to the next.
"As in the United States, the future of Canadian prepaid depends on providers finding places where their cards can displace cash and checks, and where prepaid cards can become a means for distributing value that is more efficient than other forms of payment. In many instances prepaid cards offer advantages over other payment types for distributing value, such as providing instantly issued cards that are immediately usable by the recipient, limiting funding costs, and reducing risks of fraud," commented C. Sue Brown, Director, Prepaid Advisory Service.
Highlights of the Research Include:
- The author was asked by the Canadian Prepaid Providers Organization (CPPO) to benchmark the size of the Canadian open-loop prepaid market for 2016.
- They undertook a survey of program managers and issuers to identify the size of the market and what active segments exist.
- The Canadian open-loop prepaid market has nine active segments out of a possible 17. This suggests that there is room for future growth in the market.
- The total market size is CAD$3.6 billion in dollars loaded onto open-loop prepaid cards, an increase of 17.4% over the prior year.
- There is room for additional growth in prepaid debit cards categories and types or segments.
1 Executive Summary
3 Methodology: Measuring the Market While Maintaining Confidentiality
4 The Size of the Canadian Open-Loop Prepaid Market
5 General Purpose Reloadable Cards
6 The Open-Loop Gift Cards and Mall Gift Cards
7 Additional Segments Active in Canadian Commercial Prepaid Market
8 Conclusions: The Canadian Market Has Room for Growth and New Segments
List of Figures
Figure 1: U.S. Taxonomy of Prepaid Cards: 11 Categories, 25 Market Segments
Figure 2: Taxonomy of the Canadian Open-Loop Prepaid Market: 3 Categories, 17 Market Segments
Figure 3: Why Measuring Loads Produces the Best Benchmark of the Total Market
Figure 4: Nine Active Segments Supplied the Total Loads onto Canadian Open-Loop Prepaid Cards, 2015, 2016
Figure 5: The General Purpose Reloadable Segment of the Canadian Open-Loop Prepaid Market, 2015, 2016
Figure 6: The Open-Loop Gift Card and Mall Gift Card Segments of the Canadian Prepaid Market, 2015, 2016
Figure 7: Average Card Load in the Consumer-Funded Category of the Canadian Open-Loop Prepaid Market, 2016
Figure 8: Average Card Load in the Corporate-Funded Category of the Canadian Open-Loop Prepaid Market, 2016
Figure 9: Open-Loop Consumer and Employee and Partner Incentives Segments of the Canadian Prepaid Market
Figure 10: Average Card Load in the Incentives Segments of the Canadian Open-Loop Prepaid Market, 2016