While the U.S. gift card market continues to rise, the country's northern neighbors are also using gift cards at an increasing rate, new research finds. The Canadian Prepaid Providers Organization (CPPO) found that between 2015 and 2017, loads on open-loop prepaid cards increased 27 percent.
These findings, part of CPPO's annual benchmark study, "Canadian Open-Loop Prepaid Market: 2017," was conducted by Mercator Advisory Group, and also included that a total of CAD$3.8 billion (US$2.2 billion) in total dollars was loaded onto open-loop cards (those bearing a Visa, MasterCard, or other financial services brand logo and which can be used at any merchants who accept those cards). The numbers were also positive when broken down into individual categories of corporate-, consumer-, and government-funded cards -- increases to average loads per card were found in all 17 categories the report looked at.
General-purpose reloadable cards -- those cards loaded by shoppers for their personal finance use -- grew almost 10 percent to total CAD$2 billion (US$1.53 billion).
"The Canadian open-loop prepaid market has demonstrated dynamic growth across a number of key metrics including the number of cards purchased by consumers and the value consumers placed on each card," said Tim Sloane, vice president payments innovation, Mercator Advisory Group, in a statement. "This data indicates growing confidence in open-loop prepaid products by consumers, businesses and government agencies for a wide range of purposes."
The study found that the average funds placed onto corporate-funded prepaid cards grew by 66 percent and the average funds loaded onto consumer incentives and employee and partner incentive cards grew by 76 percent, reflecting a shift from one-time use payments to regular reloading of funds and the growing role of self-use in gift card purchases.
"Prepaid products continue strong and steady growth in the Canadian market with some exciting new penetration in transportation, entertainment and gaming," said David Eason, CPPO chairman, in a statement. "The big increases in average loads per card show how these products are becoming stickier with regular loads versus one-time use."