Market Research Logo

Prepaid and Gift Cards in Canada

Prepaid and Gift Cards in Canada

Canada has become a fertile market for prepaid and gift cards. Both payment instruments have contributed to double digit growth of late, and the opportunity for competitors in this industry to gain and increase their market share.

In our report, Prepaid and Gift Cards in Canada, Packaged Facts projects that open-loop and closed-loop transaction volume would rise more than 15% in 2014.

Participants in the Canadian prepaid and gift card market have challenges ahead: the government recently implemented new prepaid card regulations, and Packaged Facts believes that it’s only a matter of time before general-purpose reloadable prepaid card interchange rates garner more scrutiny. But with greater consumer transparency and with newer card programs offering more competitive pricing, we see robust growth for these cards in the near term.

The report analyzes how this growth can be accomplished. One way is to expand the target audience beyond the relatively narrow band of Canadian underbanked and unbanked consumers and convincing more mainstream consumers to part with their debit cards, especially 18-34s.

Packaged Facts’ Prepaid and Gift Cards in Canada gives industry participants guidance for success in the Canadian prepaid card market. Specifically, the report:

  • Addresses challenges and opportunities faced by the prepaid card industry, including regulatory trends, competition in the form of debit and bank accounts, and interchange potential.
  • Provides demographic analysis of the Canadian prepaid card user in the context of consumer debit card, credit card and checking account usage and cross-usage, as well as banked status (unbanked, banked, fully banked and underbanked).
  • Identifies and interprets key prepaid card metrics, including monthly cardholder usage costs; monthly spend; monthly purchase, ATM withdrawal, and reload transactions; length of card use and intended length of use. We also identify the percentage of prepaid cardholders with direct deposit, and then assess the degree that direct deposit influences these metrics.
  • Shares how consumers (including prepaid and debit card users) rank prepaid cards against debit cards with respect to competitive features such as card usage cost, ease of qualification, overdraft fee protection, spending control, breadth of card acceptance, and customer service.
  • Analyzes prepaid card users with respect to mobile payment trends, including smartphone penetration among the unbanked, mobile payment methods, mobile phone usage at point-of-sale, PayPal payments, and P2P methods.
  • Assesses a variety of general-purpose reloadable prepaid card brands: Nextwave Titanium+ Prepaid Visa; Iridium Prepaid MasterCard; CanaCash Financial Services PRIZM Prepaid VISA Card; Citizens Bank/Vancity Prepaid Card; opt+ Prepaid MasterCard; and the TD Go Card. Analysis is organized by the cost to buy, load, withdraw, spend, and share funds, as well as by customer service and balance inquiry costs, and by penalties.
  • Analyzes Canadian prepaid card marketer & issuer strategies, including those of card networks MasterCard, Visa and Interac and leading prepaid card issuers Peoples Trust Company, Vancouver City Savings Credit Union, DC Payments, and AllTrans Financial Services Credit Union Bank.


  • Executive Summary
    • Report Scope
      • Dollar figures in this report
    • Report Summary
      • Market size and forecast
      • Challenges & opportunities
      • Regulatory onus
      • Promotional headroom
      • Prepaid card fee, usage method & spend analysis
      • Consumer comparison of prepaid card versus debit cards
      • Prepaid card users in context: debit, credit, checking and banked status
      • Prepaid card users and mobile payments
      • Consumer gift card usage trends
      • Prepaid card brand analysis
      • Prepaid card marketer & issuer strategies
  • Regulatory Overview
    • Canadian payments infrastructure
    • Payment methods
      • Table Canadian Payment Methods
    • Canadian payment laws
    • Payments industry undergoing significant change
      • The Task Force for the Payments System Review
      • Code of Conduct for the Credit and Debit Card Industry
    • Application to mobile payments
      • Merchant payment choice
      • Competing domestic debit applications
      • Principle of equal branding
      • Debit and credit comingling
    • CBA Mobile Payments Reference Model
    • Competition Bureau
      • Huge discrepancy between credit and debit fees
      • Challenging practices as anti-competitive
      • Competition Tribunal dismisses case against Visa and MasterCard
      • Commissioner of Competition remains watchful
      • Government picks up where Competition Tribunal leaves off
    • Adding prepaid cards to the regulatory mix
  • Market Size and Forecast
    • Prepaid card payment and transaction volume: market size & forecast
    • Prepaid card issuing banks help tell the story
      • Table Credit and Debit Card Service Fees: Major Canadian Bank Prepaid Card Issuers, 2004-2013
      • Looking to the U.S.
      • Comparing to Canadian Payments Association data
    • General-purpose reloadable prepaid card programs
      • Table Canadian General Purpose Reloadable Prepaid Cards, by Issuer, Network and Customer Segment, 2014
    • Closed-loop prepaid cards
      • Gift cards
        • Table Dollar Value and Dollar Share of Canadian Gift Cards Given in Past 12 Months, by Gifting Occasion, 2014
  • Challenges and Opportunities
    • Summary analysis
    • Regulatory hoops give card associations a workout
      • But no real prepaid bite . . . yet
    • Welcome to Society Banked
      • A financial inclusion leader-great news for Canadians; bad news for prepaid
      • Accounts
      • Debit cards
      • Credit cards
        • Table Credit Cards, Debit Cards & Bank Account Usage: Top 10 Countries, 2011
      • High penetration rates among young and lower-income adults
        • Table Percent of Canadian Adults with Credit Cards Debit Cards, and Accounts at Financial Institutions, by Gender, Age and Income Quintile, 2011
      • Overcoming debit
      • Why would merchants give up debit?
        • Table Visa & MasterCard Consumer Credit Interchange Rates, Interac Debit Cost per Transaction & American Express Card Fees: Canada, 2013
      • But prepaid offers bank issuers incentive
      • could become an issuer's dream
      • Just a small slice of the debit pie will do
        • Table Canadian Merchant Fee Analysis: Interac Debit vs. Prepaid Cards, 2013
    • Checking
      • Amount of fees tied to type and breadth of services
        • Table Royal Bank of Canada Checking Accounts: Target Audience, by Transaction Frequency, Card/ATM Use and Additional Service Interest, 2014
      • Wide differences in prices and breadth of services
        • Table Royal Bank of Canada Checking Accounts, by Monthly Fee, Rebate Fee, Debits Included, Overdraft, ATM Fee Waiver, and Credit Card Fee Waiver, 2014
      • Rebates bring down costs
        • Table Royal Bank of Canada Checking Account Rebates, by Account, 2014
      • But low-fee options galore
        • Table Low-Cost Checking Accounts at Major Canadian Banks, by Bank, Eligibility, Monthly Fee and Included Transactions, 2014
    • Issuer-driven promotions
  • Prepaid Card Fee, Usage Method & Spend Analysis
    • Summary analysis
    • Monthly costs and usage frequency
      • Table Average Monthly Prepaid Card Costs; Length of Use & Intended Use; Times Used for Purchase, Withdrawal & Reload; and Spend, by Gender, Age and HH Income, 2014
    • Presence of direct deposit
      • Table Share of Prepaid Card Users Linking Card to Direct Deposit & Length of Time Having Direct Deposit, by Gender, Age & HH Income, 2014
    • Direct deposit: influence on card costs and usage
      • Table Average Monthly Prepaid Card Costs; Length of Use & Intended Use; Times Used for Purchase, Withdrawal & Reload; and Spend: Direct Deposit vs. No Direct Deposit, 2014
    • Active prepaid card users
      • Table Share of Prepaid Card Users Using Card for Purchase, Withdrawal & Reload, by Gender, Age & HH Income, 2014
  • Consumer Comparison of Prepaid Card versus Debit Cards
    • Summary analysis
      • Overdraft and spending control; qualification; and card costs draw strongest opinions
      • Debit card users versus prepaid card users
        • Table Debit Card vs. Reloadable Prepaid Card Attribute Comparison: Mean Response Rate, by Debit and Prepaid Card Users, 2014
      • Wide swath of indecision
    • Debit card users
      • Table Debit Card vs. Reloadable Prepaid Card Attribute Comparison: Mean Response Rate among Debit Card Users, by Gender, HH Income, Province & Population Density, 2014
    • Prepaid card users
      • Table Debit Card vs. Reloadable Prepaid Card Attribute Comparison: Mean Response Rate among Prepaid Card Users, by Gender & HH Income, 2014
  • Prepaid Card Users in Context: Debit, Credit, Checking and Banked Status
    • Summary analysis
    • Checking and payment cards
      • Checking and debit entrenchment
      • But prepaid cards have gained traction
    • Demographic analysis
      • Table Checking Account, Debit Card, Credit Card, Gift Card and GPR Prepaid Card Usage Penetration, by Demographic, 2014
    • Cross-payment and checking account usage trends
      • Prepaid usage challenges
        • Table Checking Account, Debit Card, Credit Card, Gift Card and GPR Prepaid Card Usage, Cross-Penetration, 2014
    • Making headway among underbanked
      • Banked, fully banked, underbanked and unbanked share of population
        • Table Banked, Fully Banked, Underbanked and Unbanked Share of Population, by Demographic, 2014
    • A strong correlation
      • Table Prepaid Card Usage Penetration: Unbanked, Alternative Financial Services Users, Underbanked, Banked & Fully Banked, 2014
  • Prepaid Card Users and Mobile Payments
    • Summary analysis
    • Smartphone usage trends
      • Who's got a smartphone?
        • Table Percent of U.S. Adults Owning Mobile Phones & Smartphones, w/ Smartphone Share, by Demographic, 2012-2013
      • Unbanked and AFS users are smartphone enabled
        • Table Percent of Adults That Have Mobile Phone & Smartphone: Unbanked, Alternative Financial Services Users, Underbanked, Banked & Fully Banked, 2014
      • Prepaid users driving mobile payments
        • Table Mobile Payment in Last 12 Months & Monthly Payment Frequency: Prepaid Card Users vs. Non-Users, 2014
      • Driving mobile P2P and bill payment
        • Table Mobile Payment Methods Used in Past 12 Months: Prepaid Card Users vs. Non-Users, 2014
      • As well as mobile POS payments
        • Table Mobile Phone Usage at Point-of-Sale in Last 12 Months, by Payment Method: Prepaid Card Users vs. Non-Users, 2014
      • And internet payment methods
        • Table PayPal Payments & P2P Methods Used in Last 12 Months: Prepaid Card Users vs. Non-Users, 2014
  • Consumer Gift Card Usage Trends
    • Summary analysis
    • Gift card giving in the past 12 months, by occasion and recipient
      • Top occasions, by dollar value
        • Table Dollar Value and Dollar Share of Canadian Gift Cards Given in Past 12 Months, by Gifting Occasion, 2014
      • Top recipients, by dollar value
        • Table Dollar Value and Dollar Share of Canadian Gift Cards Given in Past 12 Months, by Gifting Recipient, 2014
      • Gift card occasion and recipient dollar value matrix
        • Table Dollar Value and Dollar Share of Canadian Gift Cards Given in Past 12 Months, by Gifting Occasion and Recipient, 2014
  • Prepaid Card Brand Analysis
    • Summary analysis
    • Prepaid card brand analysis
      • In summary
        • Table Canadian General-Purpose Reloadable Prepaid Card Fee Analysis: Five Leading Card Brands, 2014
      • Desjardins provide steep competition
      • TD Go Card shows promise
        • Table TD Go Card Fee Analysis, 2014
      • Citizens Bank/Vancity
        • Table Citizens Bank/Vancity Prepaid Card Fee Analysis, 2014
        • Table Nextwave Titanium+ Prepaid Visa Fee Analysis, 2014
        • Table Iridium Prepaid MasterCard Fee Analysis, 2014
  • Prepaid Card Marketer & Issuer Strategies
    • Summary analysis
    • Card association strategies
      • Table MasterCard Canada & Visa Canada Combined Card Value & Transactions, 2008-2013
    • MasterCard Canada
      • Targeted prepaid categories
      • Program management services
      • Oh, Canada! Onward and upward since 2008
      • Contactless leadership
      • Prepaid card brands
        • Table MasterCard Canada General-Purpose Reloadable Prepaid Cards, by Brand Name, Bank Issuer and Customer Segment, 2014
      • Share of the Canadian payments pie
        • Table MasterCard Canada Card Value and Transactions, 2008-2013
    • Visa Canada
      • A growing debit foothold
      • How much debit volume is Visa debit volume?
      • Prepaid card brands
        • Table Visa Canada General-Purpose Reloadable Prepaid Cards, by Brand Name, Bank Issuer and Customer Segment, 2014
      • Share of the Canadian payments pie
        • Table Visa Canada Card Value and Transactions, 2008-2013
    • Interac
      • Non-profit status a boon and a bane
      • Going corporate
      • Products and services
      • Interac Flash
      • Interac Online
      • Interac e-Transfer
      • Low, low, low, low, low fees!
      • Share of the payments pie
        • Table Interac Association: Transaction, User, Terminal, Merchant, and ABM
    • Bank issuers
      • Peoples Trust
        • Table Peoples Trust Canada General-Purpose Reloadable Prepaid Cards Issued, by Brand Name, Network Brand and Customer Segment, 2014
        • Table Peoples Trust Canada Non-Interest Income: Credit/Debit Card Service Fees, 2004-2013
      • Citizens Bank/Vancity
        • Table Citizens Bank of Canada General-Purpose Reloadable Prepaid Cards Issued, by Brand Name, Network Brand and Customer Segment, 2014
        • Table AllTrans Financial Services Credit Union General-Purpose Reloadable Prepaid Cards Issued, by Brand Name, Network Brand and Customer Segment, 2014
        • Table AllTrans Financial Services Credit Union Prepaid Debit Program Income, 2011-2013
      • DC Payments
        • Table DC Bank General-Purpose Reloadable Prepaid Cards Issued, by Brand Name, Network Brand and Customer Segment, 2014
  • Appendix
    • Methodology
      • Consumer survey methodology
      • Packaged Facts Canadian Survey Demographics
    • Market size methodology
    • Report data sources
    • Report table interpretation
      • Color coding
      • Indexing
      • Dollar figures in this report
    • Terms and definitions
      • Unbanked, underbanked and related definitions
      • Prepaid cards versus debit cards
      • Other terms
    • Abbreviations

Download our eBook: How to Succeed Using Market Research

Learn how to effectively navigate the market research process to help guide your organization on the journey to success.

Download eBook

Share this report