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Surge in electronic payments--representing around 77 per cent of all transactions, reports Payments Canada

·8 min read

Credit card use exceeds debit for first time with 16 per cent YOY growth; Cash use shrinks a further 9 per cent

OTTAWA, ON, Nov. 17, 2020 /CNW/ - Evolving technology and payments innovation continues to transform the way Canadian consumers and businesses make payments, according to new data from Payments Canada's annual Canadian Payments: Methods and Trends 2020 report.

Logo Payments Canada (CNW Group/Payments Canada)
Logo Payments Canada (CNW Group/Payments Canada)

In pursuit of more convenient, faster and secure payment experiences, Canadians continue to adopt new and evolving digital payments methods and channels—including contactless (tapping card or mobile phone), wearables, in-app payments and e-commerce. The newly released 2020 report analysed the 22 billion payment transactions made in 2019, totalling CA$9.9 trillion in value. The study points to insights and trends that continue to transform the Canadian payments landscape.

"We continue to see a widespread shift away from paper-based payments, cheques and cash, as Canadians increasingly demonstrate preference for faster, easier and more secure payment experiences," said Tracey Black, President and CEO of Payments Canada. "The migration to digital payments, a trend that we have observed for a number of years, has been accelerated by the COVID-19 pandemic. More than ever, we are seeing that Canadians' payment preferences can be impacted by available payment options, for example, contactless payment. Innovation will continue to evolve consumer and business expectations regarding payment flexibility and efficiency."

Key 2019 findings include:

  • Electronic payments increased significantly accounting for approximately 16.9 billion transactions, representing around 77 per cent of total payments volume (number of overall payment transactions), and 62 per cent of total payments value (the combined monetary value of total transactions) in 2019.


  • Paper-based payments continued to decline in 2019 accounting for approximately 3.7 billion transactions representing 23 per cent of total payments volume. Cheques and paper-based payments continued to play a significant role, accounting for 35.9 per cent of total payments value. Other paper-based payment methods, cash and ABM withdrawals, accounted for only 1.5 percent of total value.

Summary of all payment totals by volume and value of transactions over last five years
(2014 vs 2019)

Payment
Method

Total Volume
2014

Total Volume 2019

Change from 2014

Total Value 2014

Total Value 2019

Change from
2014

in Millions

% of
Total Volume

in Millions

% of
Total Volume

%

$ Millions

% of
Total Value

$ millions

% of
Total Value


Credit Card

4,230.0

21.1%

6,859.0

31.1%

62.2%

418,358.3

4.9%

615,154.0

6.2%

47.0%

Debit Card

4,907.0

24.5%

6,256.0

28.4%

27.5%

214,340.2

2.5%

259,255.0

2.6%

21.0%

Cash

6,583.0

32.8%

4,065.0

18.4%

-38.3%

116,366.0

1.4%

85,649.0

0.9%

-26.4%

EFT

2,476.0

12.3%

2,947.2

13.4%

19.0%

3,732,905.4

43.8%

5,178,683.0

51.8%

38.7%

Cheques and Paper

950.0

4.7%

583.9

2.6%

-38.5%

3,925,570.2

46.1%

3,586,221.0

35.9%

-8.6%

Online Transfers

81.5

0.4%

540.6

2.5%

563.3%

31,678.4

0.4%

178,224.9

1.8%

462.6%

ABM

623.0

3.1%

466.1

2.1%

-25.2%

72,799.5

0.9%

67,082.0

0.7%

-7.9%

Prepaid Card

200.0

1.0%

328.0

1.5%

64.0%

11,934.6

0.1%

19,237.0

0.2%

61.2%

Total

20,050.5

100%

22,046.7

100%


8,523,952.6

100%

9,989,505.9

100%


Looking at 2020 and the impact of COVID-19 on Canadian payments trends:

The COVID-19 pandemic deeply impacted the global payments industry in early 2020, as millions of businesses and consumers shifted their payment behaviour. In particular, Payments Canada's payment trends during COVID-19 study in 2020 indicated that the pandemic further accelerated digital and contactless payments. Additional 2020 expected payments shifts include:

  • Canadians spending less: In the first few weeks of the pandemic, 75 per cent of Canadians indicated they were spending less as they stayed home, overall incomes decreased and people became more wary of their personal finances.

  • Contactless payments continue to grow: Canadian consumers and businesses are expected to continue to favour contactless payment methods due to concern around transmitting the virus through surface contact. In the early months of the pandemic, 40 per cent of Canadians avoided retailers that did not accept contactless payments.

  • Accelerated decline in cash use: Concerns of excessive surface contact through cash and coins has both merchants and consumers shifting away from regular cash usage and acceptance.

  • E-commerce growth: There is an expected rise in the volume and value of e-commerce transactions as more Canadians "shop from home" with less brick and mortar shopping. Physical locations of businesses will likely pivot to e-commerce in order to meet consumer demand and reduce overall costs.

"Looking to the future, the payments landscape will continue to evolve dramatically, fuelled by new technologies, consumer demands and shifting competitive dynamics," said Cyrielle Chiron, Payments Canada's Head of Research and Strategic Foresight. "Beyond the continued shift toward digital and contactless payments, Payments Canada is building the foundation for the next generation of payments to ensure Canadian consumer and business needs for more control, speed, convenience and affordable payments methods are met. This includes future opportunities for innovation with the launch of Canada's real-time rail in 2022."

The Canadian Payments: Methods and Trends 2020 report was compiled by Payments Canada with the help of payment service providers, payments consultants and researchers to help build a comprehensive understanding of the Canadian payments landscape in 2019.

About Payments Canada
Payments Canada ensures that financial transactions in Canada are carried out safely and securely each day. The organization underpins the Canadian financial system and economy by owning and operating Canada's payment clearing and settlement infrastructure, including associated systems, bylaws, rules and standards. The value of payments cleared and settled by Payments Canada in 2019 was over $55 trillion or $218 billion each business day. These encompass a wide range of payments made by Canadians and businesses involving inter-bank transactions, including those made with debit cards, pre-authorized debits, direct deposits, bill payments, wire payments and cheques. Payments Canada is a proud supporter of the Catalyst Accord and the 30% Club.

SOURCE Payments Canada

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