Protecting users of prepaid payment cards: At the mercy of market forces (in French only)


Option consommateurs




Canadians are great fans of electronic modes of payment, and the statistics on the subject confirm this. They have on average, close to two credit cards each, and make 3. 4 billion direct payment transactions with their Interac cards. Moreover, there are 1631 automatic teller machines per million inhabitants in Canada, one of the highest concentrations in the world. In this context so conducive to electronic transactions, new products are constantly emerging and attempting to become popular in their turn. Among these are prepaid Visa and MasterCard cards, known as open loop, refillable, or prepaid cards that are trying to penetrate the Canadian electronic payment market. These cards are distributed by various types of businesses: banks, stores specialized in fast cheque cashing, and “lease to buy” stores; until very recently, they were distributed by the television company MuchMusic. They are even available directly over the Internet. As with debit cards, but without a bank account, the consumer only uses the money he has deposited directly into his card. Just like credit cards, these cards are accepted everywhere the logos of Visa and MasterCard are found. In short, Visa and MasterCard prepaid cards are a marriage of the characteristics of Canadian credit cards and debit cards. That being said, the advent of this new mode of payment raises many questions. What is the state of this market? What is the legislative framework regulating the use of these cards? Why do consumers do use them? Do they encounter any problems once they have used them? The aim of this project is first of all to understand the motivations of the users of prepaid cards in Canada, to record the difficulties these cards can cause, then propose solutions.

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French only

OCA Funded Research
This research received funding support through the Office of Consumer Affairs' Contributions Program.

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Source: Consumer Policy Research Database

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