Can you tell us about Peoples Card Services and what role the company fills within the industry?
Peoples Card Services is a subsidiary of Peoples Trust, a federally chartered financial institution that has been providing financial services to Canadians for more than 30 years. As the largest open-loop and payment network branded prepaid issuer in Canada, Peoples provides program managers and fintech companies with BIN sponsorship, issuing services, regulatory expertise, market guidance and access to the payment networks’ infrastructure. The company has issued more than 30 million cards in more than 750 programs across Canada, totaling more than CA$1.2 billion in loads in 2015.
In 2016, Peoples was recognized as the leading prepaid organization in Canada by Payments Exchange, a prominent payments organization. As the top prepaid issuer in Canada, Peoples issues the award-winning Titanium+ Prepaid MasterCard®, the popular Vanilla® product line, the Ideal Choice® and Perfect Gift® payment cards, along with several hundred other prepaid applications in both business and consumer markets, including: corporate incentives, promotions, channel sales, government, travel, health, financial services and shopping.
Can you tell us about the current state of the open-loop prepaid industry in Canada? How does it compare to the U.S.?
Canada is one of the fastest-growing global markets for prepaid program expansion. According to Mercator Advisory Group, CA$3.1 billion in dollars was loaded onto open-loop prepaid cards of all types in 2015. Open-loop prepaid is a significant payments tool in Canada that fills key gaps in the current payment system because it is more secure, efficient and user-friendly than checks and cash. Canada’s open-loop prepaid card industry is a great example of an emerging payment product in which financial institutions and fintech firms have successfully partnered.
The Canadian market is expected to follow U.S. trends, where open-loop prepaid cards are the fastest-growing form of electronic payment. Mercator Advisory Group reported that the total load value in the U.S. reached $264 billion in 2014, so Canada’s current market is just at the tip of the iceberg.
How is Peoples Card Services delivering on innovation in the ever-changing and highly-competitive Canadian payments landscape?
Peoples has been recognized repeatedly for its innovative advancement of prepaid payments applications across business and consumer markets in Canada, due to our pioneering partnerships with fintech companies and program managers. Peoples and its partners use prepaid payments technology as a means to improve financial inclusion for consumers, remove friction and cost from business payments, and implement more secure ways to distribute funds where and when people need them.
Delivering on its innovative approach, Peoples was the first to market with prepaid cards that were NFC and EMV-enabled in Canada, and the first to offer a real-time instant issuance of a prepaid MasterCard. Peoples launched the first contactless PayPass prepaid program in Canada, as well as the first chip-and-pin prepaid travel card in foreign currencies. And the first to introduce a virtual Visa consumer prepaid card that was used exclusively for more secure online purchasing.
Peoples Card Services’ innovation was recently recognized by Payments Exchange with two industry awards, including: Peoples Card Services’ president as ‘Industry Person of the Year’ and ‘Best Consumer-funded Prepaid Program’ for its partnership with InComm and National Money Mart Company on the Titanium+ Prepaid MasterCard®.
Why do fintech companies need to work with financial institutions to be successful, aren’t they competing with them?
A growing number of fintech companies are partnering with long-standing financial institutions like Peoples to successfully launch their programs across Canada. Fintech companies are natural technology innovators, while incumbent financial institutions have unparalleled experience navigating the payments and regulatory landscape.
Fintech has gained a reputation for being a traditional banking disruptor, but in many cases they need to partner with experienced financial institutions to successfully go to market. This allows fintechs to focus on what they do best and leave the regulatory compliance and network expertise in the capable hands of their financial institution. Peoples offers extensive regulatory, market and payment solutions expertise and resources that enables fintech companies and program managers to launch in Canada.