Abstract
Prepaid payment markets around the world are expanding and becoming more
developed. Canada' s payment card market is exhibiting growth in its prepaid
segment and offering a wider variety of products:
[1] Prepaid Gift -- Canadian consumers are highly familiar with
prepaid gift cards, which were initially offered by only a limited number of
retailers during the holiday season. However, as merchants and consumers
realized their benefits, gifts cards are now offered year round by almost all
retailers. Similarly, the advantages of prepaid products and programs are
becoming more evident to other segments of the Canadian payment market, in
both the public and private sector.
[2] Payroll Cards -- The issuance of paychecks on prepaid cards
can be beneficial for employers as well as employees in many ways beyond the
simple reduction in paper.
[3] Government Benefits -- Issuing government benefits payments on
prepaid cards can reduce costs for the government of Canada as well as provide
more convenience for benefits recipients.
These are three of the many markets that have significant growth potential in
the Canadian prepaid market where there is still significant growth to come.
"In Canada, gift cards currently dominate the prepaid market, however, there
is certainly potential for growth across other segments. Opportunities exist
for retailers, banks, financial institutions, third-party companies, and many
other players," notes Elisa Athonvarangkul, Analyst, International
Advisory Service. "As Canadian consumers become increasingly aware of the
variety and benefits of prepaid payment products... the high potential for
growth is irrefutable."
The most recent report from Mercator' s International Advisory Service provides
an overview of current prepaid market segments in Canada.
The report presents:
- a review of recent trends and development in the gift card market
- a discussion of payroll cards in Canada
- an examination of potential prepaid government benefits payments programs, and * a review of selected prepaid products and programs in the Canadian market, including electronic toll passes, transit fare cards, and campus cards.
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