Report: General-Purpose Reloadable Prepaid Cards Gaining Support From Canada's Banking Institutions

ROCKVILLE, Md., Sept. 15, 2014 /PRNewswire/ -- Major Canadian banking institutions have begun to enter the general-purpose reloadable prepaid card market, a move that bodes well for longer-term growth, according to Prepaid and Gift Cards in Canada, a recent report by market research publisher Packaged Facts.

The report can be found at:  http://www.packagedfacts.com/redirect.asp?progid=86658&productid=8103774.

Importantly, the move opens up growth avenues beyond the narrow band of unbanked and underbanked Canadian consumers who have heretofore been the primary targets for these cards. Travel prepaid cards open doors to international use, for example. Meanwhile, cards such as TD Bank's TD Go Card target banked families.

Canada is a world financial inclusion leader, which, for its residents, is a very good thing. However, it leaves less room for products such as prepaid cards, especially when banking account ownership is nearly universal, debit cards are so prevalent, and low-cost bank accounts are offered by the country's major banking institutions. 

"Because Canada is so highly banked, expanding the target audience of general-purpose reloadable prepaid cards beyond underserved consumers is key to growth, a strategy some of these newer cards are clearly intended to actualize," says Packaged Facts research director David Sprinkle

Packaged Facts estimates there are now at least 37 general-purpose reloadable prepaid card programs in Canada, split almost evenly between MasterCard and Visa. All but eight of the programs identified are consumer card programs, while three target government and five target businesses.

While new prepaid card regulations are now in force, Packaged Facts anticipates that government regulation will continue to warm the necks of the Canadian payments industry players, and that it's only a matter of time before prepaid card interchange rates garner more scrutiny. Simply put, they generate interchange rates far above the fees generated by the country's Interac debit card platform. Given the continued heated debate surrounding interchange, strong support for merchants that loathe paying MasterCard and Visa interchange, and a government inclined to listen, Packaged Facts imagines battle lines are already being drawn.

But with more card programs entering the mix, in the near term, Packaged Facts forecasts robust growth for these cards, which remain a payments niche in Canada. Notably, unlike the United States, where government programs helped lead growth, Canadian government programs are relatively rare, perhaps owing to debit's status as a national treasure. Packaged Facts sees more continued potential in corporate incentive and gifts cards, in addition to the expanding consumer space.

For more information on Prepaid and Gift Cards in Canada and other reports in Packaged Facts' industry-leading catalog of financial services market research reports, please visit: http://www.packagedfacts.com/.

About Packaged Facts – Packaged Facts, a division of MarketResearch.com, publishes market intelligence on a wide range of consumer market topics, including consumer demographics and shopper insights, consumer financial products and services, consumer goods and retailing, consumer packaged goods, and pet products and services.  Packaged Facts also offers a full range of custom research services.

Please visit Packaged Facts on LinkedIn, Twitter and Google+ for more insights. 

Press Contact:
Daniel Granderson
240.747.3035
[email protected]

Logo - http://photos.prnewswire.com/prnh/20140801/132630

SOURCE Packaged Facts