Prepaid’s B2B Canadian Payments Moment: Disrupting the Future of Business Payments

In the past few years alone, the rapid acceleration of technology innovation, digital payments solutions and a rise of financial services partnerships have allowed fintechs and financial institutions to launch new products into the market faster than ever before.

Behind much of that innovation gaining traction in the Canadian payments market is a prepaid solution. As a rapidly-growing market, the CA$8.7 billion Canadian prepaid industry has grown 75 percent in just two years and has established itself as a platform to bring new, innovative solutions to market that are secure, flexible, ubiquitous and inclusive.

Prepaid as an innovation rail fueling the transformation of Canada’s digital payments and banking ecosystem was the key theme at the 2022 CPPO Prepaid Symposium. At the Symposium, I facilitated a panel discussion with Canadian payments leaders to dissect where the greatest use cases exist to break through the under penetrated B2B payments market.

How Prepaid is Making Headwinds in Business Payments

It’s clear across the Canadian payments ecosystem there is a need and desire to move money faster, which is driving rapid product development across the B2B sector. The need for fintechs and financial service providers to be agile, and deliver turn-key solutions that businesses can adopt easier and faster is a key trend that’s playing out.

As explored as a main theme of the symposium, prepaid cards have allowed for the development and introduction of numerous innovative use cases to the Canadian payments ecosystem, for both consumer and business segments. What was once reserved for the consumer market has created new value propositions for businesses looking to innovate B2B and B2B2C payments.

Prepaid as a platform is giving rise to greater digital financial services innovation that benefit more Canadian consumers and businesses. On the consumer side, for example, prepaid has cemented itself into conversations about how to expand buy-now-pay-later solutions. Similar digital innovation is occurring on the business payment side.

The B2B payments market is taking note of how a growing desire for digital payments can be applied in their ecosystem. Prepaid is also creating new ways for businesses to attract and retain customers, helping them boost customer acquisition and loyalty through new payments and rewards programs. This use case exists for both B2C and B2B payments.

Trends to Watch: Use Cases in the B2B Payment Market

On the SMB payments solution side, prepaid is part of the next wave of payments digitization — paving the way for businesses to develop faster, more efficient, more secure payments across their entire organization. Businesses are realizing that to innovate their payout processes, they have to be more user-friendly — which means creating solutions that look and feel similar to consumer payments. Companies working across both sectors are learning how to contextually apply what works in B2C to the B2B world.

From real-time B2B payouts — including vendor/supplier payments and expense management — to disbursements, cross-border payments and insurance payments and beyond, B2B has reached a tipping point in the Canadian payments market. Prepaid is leading the digital innovation charge as new use cases emerge every day.

While the more mature U.S payments market has set a benchmark for Canada to measure against, Canadian companies are making headwinds when it comes to disrupting cross-border business payments. But as digital innovation continues to break down geographical barriers — and companies serve customers in both markets — there will be a greater push for more collaboration across the entire payments industry.

These use cases have gained prominence and employ a host of value propositions for businesses across all industries. From delivering new products and services that reach businesses’ unique needs, to driving operational effectiveness, prepaid has become a core B2B payments offering. Prepaid continues to disrupt the world of real-time B2B payouts to help businesses better manage their entire payment infrastructure and drive more efficiencies.

For many companies the pandemic has changed how they think about innovation. Innovation on prepaid card rails is moving quickly today in ways that are safe and convenient for everyone involved in the transaction. The trick to solve in this market is how to collectively deliver better value propositions to everyone.

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Sheree Thornsberry is a senior consultant at The ROIG Group and co-leads the Financial Services practice. Sheree is the former Executive Vice President and Head of Payments for MetaBank where she led prepaid, debit, correspondent and ATM. She was named one of the Most Influential Women in Payments in 2020. Sheree previously held senior leadership positions at Intelispend and Blackhawk Network.