A new report by Payments Canada has found that credit cards are leading the way for Canadian consumers to enjoy frictionless payments, also enticing new customers with exciting rewards programs. The 2017 Canadian Payment Methods and Trends Report reveals that increasing numbers of Canadians are now preferring to use online and mobile banking systems as opposed to paper-based statements.
Payments Canada, which oversees all financial transactions nationwide, ensuring their security and safety, noted more than 21.3 billion payments made by businesses and consumers in Canada throughout 2016, with a value of over $9 trillion. More Canadian consumers are choosing to use their credit cards at the point of sale, with $462 billion worth of transactions made using credit in 2016. The country is fast becoming a leader in the global credit card industry as more consumers – and businesses – are choosing to use their credit cards for bigger chunks of their monthly outgoings so that they can go out in style and get rewarded for it, earning points to help with shopping, movie tickets, cashback and more.
The number of in-app and online purchases made using frictionless payment methods is on the rise in Canada. The report finds that 90% of all online and in-app transactions were completed using credit cards. The use of mobile wallets in Canada has been a relatively new advancement, but the report also indicates that many consumers are already comfortable using their phones or cards to tap at the point of sale, providing a further boost for credit and debit card firms.
One of the most significant developments in the last 12 months appears to be consumers’ attitude towards the safety and security of online banking. Online bank transfers and PayPal payments were up almost 48% in 2016, with the total value of these transactions reaching $68 billion. More Canadian businesses were also growing in confidence with online bank transfers, with around 10% of all online transactions now completed by commercial organizations, compared with less than 5% in previous years.
Another key statistic published by Payments Canada from the last 12 months is that electronic funds transfers, which tend to be linked with bill payments for homeowners and paychecks, finally overtook the value of cheque payments. However, despite reaching this critical landmark, use of electronic funds transfers fell year-on-year as more Canadians are seeking to use credit cards to pay for utilities and insurance policies, earning incentives and rewards in the process.
Perhaps the most interesting development to watch for Canada’s financial institution in the coming years is growing popularity of payments made via social media. China is already leading the way in terms of this new level of payment convenience, with their WeChat Pay and Alipay services, with Apple, Facebook and Google messenger services potentially offering consumers the chance to pay for goods and services via their social handles.
Anne Butler, vice president policy, research, legal and general counsel, Payments Canada, said: “The annual analysis of how these payments were made provides important insights for Payments Canada and our financial institution participants as we collaborate on the ongoing modernization of Canada’s payments architecture.”