According to PayNXT360’s Q2 2021 Global Prepaid Card Survey, prepaid card market in the Canada is expected to grow by 9.3% on annual basis to reach US$ 24,366.5 million in 2021.The prepaid card market expected to grow over the forecast period, recording a CAGR of 7.8% during 2021-2025. The prepaid card market in Canada will increase from US$ 22,299.2 million in 2020 to reach US$ 30,150.4 million by 2025.

    Almost all Canadian citizens have an existing banking relationship, helping the open-loop prepaid cards market record significant growth. Two of the most prominent growth areas for the Canadian prepaid card industry are the gig economy, where contractors receive wages on a prepaid payment instrument, and neobanks, where Gen Z and millennials are signing up for app-based prepaid accounts.

    Despite the fact that the banking penetration is very high, the country’s aboriginal communities are mostly unbanked. Therefore, the adoption of prepaid cards by these communities to make up for the lack of access to traditional banking services is also supporting the growth of the prepaid card market in Canada.

    Stored-value cards appeal to employers of freelancers in Canada:

    Nearly 10% of adults are working in the gig economy in Canada. According to PayNXT360’s recent survey, close to 3.5% of the SMEs and 9.5% of large businesses uses prepaid cards to pay their gig economy workers in Canada. This is primarily due to it is cheaper and faster for the companies to get paid in prepaid cards. Prepaid cards from various businesses, including Instant Financial, Payfare, and Ceridian, enables gig workers and freelancers to gain early access to their paychecks. For instance,
    • The Dayforce card from Ceridian offers gig workers anytime access during the pay cycle. In contrast, prepaid cards from Instant Financial and Payfare provide access to wages right after every shift in Canada.

    Technology companies increasingly issuing open-loop prepaid cards for SMEs:

    In Canada, there has also been growth in issuing open-loop prepaid cards for SMEs from non-banking players such as technology companies, including e-commerce platforms and accounting software providers. For instance,
    • Major tech brands such as Square, Shopify, and QuickBooks are issuing prepaid cards for SMEs in the country. Shopify, in particular, has considerable potential to disrupt the prepaid card market in Canada with its Shopify Balance prepaid card.