Canadian consumers and businesses are increasingly turning to electronic payments in their money transactions, according to a report from Payments Canada.
The annual Canadian Payments Methods and Trends Report found electronic payments account for 73 per cent of all transaction volume versus cash at 21 per cent.
The report said new technology and payments innovation are transforming the way Canadian consumers and businesses make payments and in pursuit of more convenient, faster and secure payment experiences, Canadians are rapidly adopting newer digital channels. They include contactless (tapping card or mobile), e-commerce, mobile and online transfers.
“We are at a pivotal moment, with a number of key driving forces that are accelerating the transformation of Canada’s payment environment,” Cyrielle Chiron, Payments Canada’s head of Research and Strategic Foresight, said in a statement. “Evolving technology and industry innovation are changing the game, fuelled by consumer and business demands for friction-free, fast and secure payments.
“There has been a remarkable transition from paper-based to digital payments over the last five years, but there is still a huge opportunity and need to advance Canada’s payments landscape.”
The report analyzed the 21.1 billion payment transactions made in 2018, totalling more than $9.9 trillion in value. Key findings include:
- Overall average transaction size grew to $468 in 2018, up 22 per cent over five years from 2013.
- Electronic payments accounted for 73 per cent of total payments volume (number of overall payment transactions), and 59 per cent of total payments value (the combined monetary value of total transactions).
- Cash payments declined 40 per cent in volume over the last five years.
- Contactless payments grew 30 per cent year-over-year from 2017-2018 with a total of 4.1 billion contactless payments (card and mobile) worth $129.9 billion at the point-of-sale (POS). Debit represents almost 60 per cent of volume of these contactless payments – often viewed as a convenient substitute for cash. In fact, debit card use overtook cash for the first time in recent years.
- Mobile devices were used by nearly 35 per cent of Canadians for contactless payments on a regular basis in 2018, representing a slower uptake than contactless cards.
- Explosive growth of online transfers, with a 52 per cent year-over-year increase in volume growth from 2017-2018.
- Debit and credit cards continue to make up the largest portion of total transaction volume, while electronic funds transfers (EFT) and cheque and paper transactions dominate the transaction value. A record three billion EFT transactions demonstrates the confidence businesses have in digital – and the awareness of the value modern payments can bring for business improvements.
- Credit card use accelerated dramatically with a 52 per cent increase in transaction volume over the last five years from 2013-2018. Canada currently ranks second with highest volume use of credit cards per capita in the world after South Korea.
- Credit cards are now on par with debit cards as a share of overall payment volumes, at 29 per cent and 28 per cent respectively in 2018. According to the research, continued growth in Canada’s exceptional credit card use is fuelled by two core factors: credit card rewards and the expansion of e-commerce in Canada.
- Cheque and paper volume represent only three per cent of total payment volume in 2018, a 29 per cent decrease over the last five years. However, they represent 39 per cent of total transaction value. 2018 also marked the near completion of migrating from paper cheques to the use of electronic cheques, with 70 per cent of cheques exchanged electronically as images.
Mario Toneguzzi is a business reporter in Calgary.
The views, opinions and positions expressed by columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of our publication.