Advancing Disbursements in Canada: How Governments and Businesses Can Leverage Prepaid Platforms

As digital transformation reshapes financial services, prepaid technology is advancing its role in modernizing disbursements in Canada. With a growing need for speed, security, and accessibility, both public and private sector organizations have immense opportunities to leverage prepaid solutions to deliver funds more efficiently, securely, and inclusively than ever before.

This conversation was a key them at this year's CPPO Symposium, where industry leaders discussed the growing role of prepaid for digital disbursements and expense management, emphasizing the need for speed, choice, and seamless integration.

During the panel they compared the more advanced U.S. market, where programs like Direct Express lead, with Canada’s emerging landscape, highlighting regulatory and technological differences. Key takeaway: To meet rising consumer expectations and regulatory demands, payment programs must modernize by adopting flexible, real-time digital disbursement solutions, with Canada poised for significant growth in this area.

The Value of Prepaid: Security, Compliance, and Fraud Mitigation

Prepaid platforms are not just a payment tool — they are a compliance and security asset. In Canada, reloadable prepaid cards are treated like bank accounts by financial institutions, subject to KYC and AML requirements. This ensures that only legitimate recipients access funds, while transaction monitoring and issuer-held balances significantly reduce the risk of fraud.

Cheques, by contrast, are costly and vulnerable. Issuing a single cheque can cost between $4 and $20, while digital transactions are a fraction of that cost. Cheques are also the payment method most susceptible to fraud, with 65% of organizations reporting check fraud activity in 2024. The inefficiency is staggering: as of March 31, 2025, the CRA held 10.2 million uncashed cheques worth $1.7 billion, with nearly 1,700 new cheques issued daily by the federal government.

Prepaid solutions offer universal access, including for the unbanked and remote populations, and provide immediate access to funds—critical for disaster relief, medical trial compensation, and other time-sensitive disbursements.

How Governments Can Leverage Prepaid Technology

1. Modernizing Government Disbursements

Governments can modernize payment programs by transitioning from cheques to prepaid cards. This shift not only reduces costs but also enhances security and speeds up delivery. For example, pilot programs in the Northwest Territories are using prepaid cards to encourage financial literacy and provide a more reliable payment tool for support programs.

Customization is key: Prepaid cards can be branded with government logos, loaded in real time, and restricted to specific merchant categories (e.g., groceries, childcare, transit). Funds can also be programmed with expiration dates, and unused balances can be returned to the government, improving accountability and reducing waste.

2. Enhancing Emergency Response

Prepaid cards played a vital role during the COVID-19 pandemic, enabling governments to get money to people quickly and securely. The ability to distribute funds electronically, without the delays and risks associated with cheques, is a game-changer for disaster relief and social support programs.

3. Streamlining Administrative Efforts

By shifting administrative efforts away from cheque processing, governments can focus on better program design and management. Prepaid solutions automate many aspects of disbursement, reducing manual work and improving operational efficiency.

How Businesses Can Leverage Prepaid Technology

1. Integrating Prepaid with Expense Management

Businesses can integrate prepaid solutions with expense management platforms to automate transaction data and streamline financial operations. APIs enable seamless integration, allowing for real-time updates and automated reconciliation. This is especially valuable for industries with high-volume disbursements, such as gig economy platforms, medical trial sponsors, and property management companies.

2. Enhancing Control and Flexibility

Account-level controls and card-level restrictions allow businesses to tailor prepaid solutions to specific use cases. For example, funds can be restricted to certain categories or timeframes, ensuring compliance and reducing misuse. This level of control is particularly useful for expense reimbursement, incentives, and class action settlements.

3. Leveraging Data and Analytics

Prepaid solutions generate valuable data that can be used to drive growth and improve the customer experience. By analyzing transaction patterns, businesses can identify trends, optimize disbursement strategies, and tailor offerings to meet evolving needs.

4. Meeting Consumer Preferences

Consumers increasingly prefer electronic payments over cheques, citing speed and convenience as key factors. Virtual cards and real-time payment capabilities meet these expectations, delivering funds instantly and providing a seamless user experience. APIs and web hooks further enhance integration, ensuring that recipients receive timely updates and support.

Navigating Regulatory and Technological Differences

Understanding the regulatory and technological differences between markets is essential for successful implementation. It's important to understand the consumer protection laws in each market you operate in, and how the digital infrastructure must adapt to those requirements. In the U.S., Businesses and governments must work closely with sponsor banks and regulators to ensure compliance and leverage existing infrastructure.

International expansion introduces additional complexities, such as the need for local currency issuers and compliance with diverse regulatory frameworks. However, the lessons learned from more mature markets can inform Canadian strategies, helping to consolidate efforts and accelerate adoption.

Emerging Technologies and the Future of Disbursements

Fintech solutions and real-time payment capabilities are driving consumer adoption and efficiency. Building on existing infrastructure and leveraging partner products can support innovative use cases, such as controlled spend and real-time payouts. The integration of data analytics, automation, and customizable controls positions prepaid technology as a foundation for the future of disbursements.

Prepaid technology offers a transformative opportunity for governments and businesses in Canada to modernize disbursements, reduce costs, and enhance security. By embracing digital solutions, organizations can deliver funds more efficiently, inclusively, and securely—meeting the needs of all recipients, including the unbanked and remote populations.

The future of disbursements in Canada is digital, and prepaid technology is leading the way.

• Explore opportunities to modernize payment programs and drive adoption of digital disbursement solutions.

• Investigate how prepaid solutions can be integrated with expense management platforms to automate transaction data and streamline operations.

• Evaluate the use of account-level and card-level controls to enhance expense management capabilities.

• Assess the potential for leveraging data and analytics to drive growth and improve the customer experience.

• Gather insights on regulatory and technological differences to inform implementation strategies.

  
  

By taking these steps, governments and businesses can unlock the full potential of prepaid technology — delivering value, security, and convenience to all stakeholders.