When Canadians tap a card for coffee, receive an instant paycheck, or move money through a digital banking app, many don’t realize they’re relying on prepaid technology.
Prepaid has long been associated with disposable gift cards, but today it plays a quiet yet critical role behind the scenes of everyday financial life. It powers the services Canadians depend on, while offering fintechs a proven platform to build, innovate and grow on.
That quiet role behind the scenes is now turning into a growth engine. Research shows that Canada’s prepaid market is valued at $14 billion annually and is projected to reach $17 billion by 2028, with open-loop prepaid accounts expected to climb to 88 million. In recent years, data shows that 27% of consumers opened new prepaid accounts—outpacing new debit and credit card openings.
Plus, with satisfaction rates for reloadable prepaid products at 96%, prepaid rivals traditional payment methods while offering greater flexibility for fintech developers and end users alike.
Prepaid as the Fintech Platform of Choice
For fintechs, prepaid is the infrastructure. It provides an accessible entry point to build programs and launch cards that are inclusive, flexible, and scalable. This makes prepaid the platform of choice for fintechs looking to serve diverse customer needs without the friction and costs often tied to traditional banking rails.
Examples are already everywhere:
- KOHO uses reloadable prepaid accounts to deliver credit-building, spending insights, and instant pay features.
- Mydoh, backed by RBC, offers a youth Smart Card and app that lets parents send allowances instantly and teach money management.
- EQ Bank leverages prepaid-powered accounts to pair everyday spending with savings and budgeting tools.
- The Canadian Red Cross relies on prepaid to issue disaster relief cards that can be restricted to essential purchases like groceries or transit, ensuring funds are used as intended.
- During the pandemic, CERB benefits were distributed through prepaid providers like KOHO and We Financial, delivering emergency funds quickly and securely—even to Canadians without a bank account.
These examples highlight prepaid’s “innovation sweet spot” which is regulated enough to earn trust, yet flexible enough for fintechs and governments to rapidly develop and deploy new tools.
Expanding Financial Inclusion and Affordability
One of prepaid’s greatest strengths is its ability to serve Canadians who are often left out of traditional banking. Newcomers without credit history, gig workers with unpredictable income, youth entering the financial system, and rural or Indigenous communities with limited access to banks all benefit from prepaid solutions.
Prepaid eliminates barriers like minimum balances, credit checks, and high monthly fees that can easily run $15–$25 per month with traditional accounts. It also provides safeguards against debt and fraud. As many as 30% of consumers say they prefer prepaid for online purchases because the spending limits reduce risk.
The affordability extends to businesses and governments, too. A prepaid transaction costs around 30 cents, compared to $4–$20 for processing cheques. Meanwhile, the Canada Revenue Agency is still holding $1.7 billion in uncashed cheques, an inefficiency that prepaid platforms could solve almost immediately.
Building a More Connected Canadian Economy
Beyond individuals, prepaid is quietly transforming Canada’s broader economic fabric. Gig workers can receive instant earnings across provinces, small businesses can streamline expenses, suppliers gain faster access to payments, and students benefit from modern youth accounts. Prepaid platforms break down the geographic and institutional barriers that have historically limited participation in the financial system.
Government adoption is further proof of prepaid’s potential. Since 2015, RBC’s Right Pay platform has replaced paper cheques in the public sector. During the pandemic, prepaid enabled secure, real-time distribution of federal benefits. And in disaster scenarios, the Canadian Red Cross has delivered thousands of prepaid relief cards within days, showing how this technology can mobilize quickly when it matters most.
Aligning with Federal Economic Priorities
Canada’s new federal government has been clear about its priorities of lowering costs for Canadians, building one integrated economy, and enabling more efficient operations. Prepaid technology is already delivering on all three.
- Lowering costs: Consumers avoid traditional banking fees and credit risk, while governments and businesses reduce transaction costs.
- Building integration: Prepaid enables universal access to funds regardless of geography, institution, or banking status.
- Driving efficiency: Public sector programs already rely on prepaid for secure, targeted, and cost-effective disbursements.
Prepaid goes far beyond convenience. It’s a platform that businesses and government can rely on to lower costs, expand access, and keep Canada’s economy connected.
Jennifer Tramontana is the Executive Director of CPPO.
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