News

Study: 'A First Look into the Canadian Prepaid Market'

April 10, 2013

A new report from Mercator Advisory Group, "A First Look into the Canadian Prepaid Market," examines the Canadian prepaid market, including market characteristics, key players, regulatory frameworks, consumer behaviors, and a number of key prepaid segments.

This report offers high-level assessment of the Canadian prepaid card market. A forthcoming benchmark of the Canadian prepaid market will further explore the circumstances and details of the market.

"The Canadian prepaid market is a market with unique characteristics," said Terry Xie, director of the international advisory service at Mercator Advisory Group and principal analyst on the report. "The economy and population is about a tenth of the U.S. market but it is still one of the world's larger markets.

"The banking market is highly developed, but there are a lot of demands for prepaid cards in certain areas. So prepaid card industry participants will need to be careful determining which market segments to get into and whom they will be facing while trying to compete in the relatively concentrated market."

The research looks at several features of the Canadian market:

• the rising popularity of prepaid cards in Canada across various segments;
• the increasing use of closed-loop prepaid cards, proliferation of retail gift card programs, advances and offerings that are driving growth;
• the status of open-loop card programs and identification of the most common types;
• the early movers who are taking the lead, especially in the processing and program managing market; and
• proposed regulations that will put added pressure on issuers as they seek to maintain profitability.

Canada ranks as the 11th largest global economy, with a population of 34.5 million and one of the world's most developed banking markets, noted for significant service penetration and high consumer satisfaction, according to Mercator. Debit cards are used frequently by the vast majority of Canadians, and credit card penetration is also high. 

Read more about trends and statistics.