Prepaid, the modern payments technology platform flourishing in Canada, is the foundation behind the launch of new digital payments and banking solutions into market for the benefit of more Canadian consumers and businesses. But what's behind the market's growth, and what use cases exist to continue propelling this market forward?
REV Prepaid Chief Revenue Officer Sara Mackay-Smith answered 5 key questions about the Canadian prepaid market, including what's next for prepaid's development.
1. What is the biggest force propelling the prepaid market's growth today?
Prepaid market growth can be attributed to three significant factors:
Increasing popularity of mobile payments and digital wallets. These systems and tools offer convenience and security in managing finances, and do not require traditional banking accounts.
A growing demand for financial inclusion. Prepaid cards and mobile wallets provide underserved individuals with access to reliable financial services.
Governments shifting toward cashless societies. Prepaid cards and mobile wallets play a crucial role in facilitating this worldwide transition.
Collectively, these progressions are shaping an environment that is conducive to the continued expansion of prepaid card services.
2. What's one product or service that prepaid is impacting today that isn't getting enough attention in the payments industry?
A product that comes to mind that prepaid is impacting in today’s environment is the ‘gig’ economy.
These are services provided through short-term contracts, freelance work, or other temporary agreements. Given their flexible nature, leveraging prepaid cards for these services is an ideal solution.
Prepaid products and services are also a great fit for businesses that hire freelancers. It creates a streamline process, reduces administrative costs, and ensures adherence to freelance-specific tax regulations.
As the gig economy continues to expand, it’s expected that prepaid products and services as the transaction method of choice will also rise.
3. What is the biggest prepaid innovation use case you are seeing today?
The integration of mobile technology with financial services has skyrocketed the development of prepaid products. People can now make transactions without relying on traditional banking systems. This is especially significant for those with limited access to bank accounts.
Prepaid cards give people without traditional bank accounts more control over their spending. This includes loading funds for purchases, withdrawals, and bill payments.
Mobile money services have significantly advanced financial inclusion and literacy. Millions of people prefer to transfer money, pay bills, and monitor savings using their mobile phones.
Biometric technologies, such as fingerprint scanners, have bolstered the security of prepaid product advancements by verifying users' identities and reducing instances of fraud.
Ultimately, these innovations have empowered people to make a wider variety of transactions, promoting global financial inclusion and accessibility.
4. How can the prepaid market best position itself to navigate today's regulatory climate?
Prioritizing compliance with regulations, adapting to ongoing changes, and taking an overall collaborative approach is essential for prepaid industry leaders navigating regulatory terrain.
This means establishing relationships with regulators and policymakers, proactively offering input, addressing issues, and aiding in the creation of regulations.
Additionally, building trust in the prepaid market is crucial, and can be achieved by prioritizing transparency in fee structures, terms, and consumer protection strategies to minimize regulatory risks.
5. What’s next for prepaid innovation over the next 1-3 years?
I’m anticipating further advancement in technology, shifting consumer preferences, and evolving regulations.
With a steady increase in mobile app usage and demands for convenient fund management, transaction carry-outs, and expense monitoring, I predict we’ll see more digital-wallet-friendly prepaid cards.
There will be more development in areas of biometric authentication and real-time transaction monitoring to enhance security measures against cyber threats and fraud.
A greater selection of personalized offerings tailored to people’s goals and lifestyles is likely. Higher loyalty program integration rates, peer-to-peer payments, international remittance provisions, and even eco-friendly initiatives can be expected, as well.
There is no end in sight for prepaid card programs. As developments continue at a surefire rate, it’s an exciting time to witness a modernized payment market. I look forward to what the future of prepaid holds.
