One of the most innovative and fastest growing segments of the Canadian payments industry is prepaid. Despite the rapid growth and striking innovation, the size of the market and number of companies involved has remained largely unexamined—until now.

The Canadian Prepaid Providers Organization (CPPO), a not-for-profit organization representing the voices of the Canadian open-loop prepaid payments industry, conducted the first comprehensive analysis of the Canadian prepaid landscape. The report, The Canadian Prepaid Ecosystem 2020, captures and analyzes 74 major players in the country’s growing prepaid industry, including 30 incumbents and 35 new entrants. The CPPO also partnered with Mercator Advisory Group to publish The Canadian Open-Loop Prepaid Market 2019, an annual benchmark report.

To unpack both reports’ findings, PaymentsJournal sat down with Jennifer Tramontana, co-founder of the CPPO, and Tim Sloane, VP of Payments Innovation at Mercator Advisory Group. During the conversation, Tramontana and Sloane sketched out the contours of the prepaid market, identified the key use cases for prepaid, and discussed what the future has in store for this promising segment.

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Given Canada’s size, the prepaid industry is large—and it’s growing.

In 2004, when Mercator Advisory Group conducted the first benchmark study on the U.S. prepaid market, the industry had just 13 segments. Now, prepaid is comprised of 24 segments, explained Sloane, who authored the original study. “The prepaid market has grown in a lot of remarkable ways,” he continued.

This striking growth is not confined to the United States prepaid industry; Canada has witnessed comparable growth as well. The Canadian prepaid market, when measured by open-loop load volumes, currently sits at $4.8 billion, according to Mercator Advisory Group. Moreover, the market has grown by over 12 percent since 2018, and has seen consecutive years of growth since 2017.

While nearly $5 billion may seem small, Tramontana pointed out that Canada’s population is a fraction of the United States’ size. In fact, Canada’s population is about one tenth the size of U.S., making it roughly the size of Texas.

“So the fact that we’ve grown to about $5 billion in loads and have had a compounded annual growth rate over the last five years of nearly 12% really shows the opportunity and the growth that’s happening up here, north of the border,” said Tramontana.