Payments Report | Oct 31, 2023

Digital Transactions and Evolving Consumer Trends:  Insights from Payments Canada’s 2023 Report

Drawing insights from the “Canadian Payment Methods and Trends Report 2023” by Payments Canada, this article analyzes the current state of digital payments, highlighting the surge in adoption, the variety of available options, and the shifting consumer preferences that are driving change in the financial sector.

General Overview

• Total Transactions (2022): 20.5 billion transactions valued at $11.7 trillion.
• Market Growth (2022): 4% in volume and 7% in value from 2021.
• Economic Context: Return to pre-pandemic economic activity levels in late 2021, with challenges such as high inflation and rising interest rates in 2022.

Payment Trends and Usage

• Credit and Debit Cards: Dominated transaction volume with growth in usage.
• Cash Payments: Continued to decline, ranking fourth in transaction volume.
• Cheques: Accounted for a small fraction of total volume, decreasing by 45% over the past five years.

See:  Bank Consortium to Launch “Paze” to Challenge Big Tech’s Fintech Dominance

• Online Transfers: Showed strong growth with a 328% increase over the past five years.
• EFT and Cheques: Dominated transaction value, combining to represent 87% of total value. EFT value grew by 11% year-over-year in 2022.
• Contactless Payments: Remained popular, although the pandemic’s impact on behavior related to these payments has been waning.
• E-commerce: Accounted for 6.5% of retail sales in 2022.

Digital Payments and Innovations

• Usage Acceleration: Significant acceleration due to the COVID-19 pandemic, with high usage of digital and contactless payments.
• Adoption Among Older Canadians: Increased usage of digital payments, including contactless cards, mobile wallets, and stored payment details on websites/apps.
• Emerging Payment Methods: Increased usage in 2022, including “buy now, pay later,” digital credit/debit cards, cryptocurrency, and biometric payment technologies.
• Consumer Comfort with Digital Payments: Varied based on age group and type of payment method.

Specific Statistics and Figures

• Comfort with Payment Innovations:
  • Wearable Device Payments: 33% (18-34 years), 23% (35-54 years), 12% (55+ years)
  • Home Assistant Payments: 18% (18-34 years), 11% (35-54 years), 5% (55+ years)
  • Social Media Payments: 17% (18-34 years), 10% (35-54 years), 6% (55+ years)

See:  Autonomous IoT Transactions and Micropayments

• • Biometric Store Payments: 44% (18-34 years), 36% (35-54 years), 32% (55+ years)
  • QR Code Payments: 32% (18-34 years), 23% (35-54 years), 13% (55+ years)
• Likelihood to Use Specific Payment Innovations:
  • One-Click Pay: 39% likely to use
  • Invisible Payments: 41% likely to use
  • Scan, Pay and Go: 35% comfortable to use
  • Interac e-Transfer for In-Store Purchase: 37% comfortable to use
• Digital Payment Usage Among Older Canadians (55+ years):
  • Tapping Card at Store: 77% (start of pandemic) to 89% (30 months into pandemic)
  • Mobile Payment for Purchase: 14% to 46%
  • Stored Payment Details: 29% to 43%
• Usage Increase of Emerging Payment Methods (2022):
  • Tappable Smartphone Wallet: 53% increased usage
  • Cryptocurrency: 59% increased usage
  • Buy Now, Pay Later: 48% increased usage
  • Biometrics for Purchases: 26% used in the past year

See:  Preparing for Retail Payment Act Changes

• Business and Consumer Payment Preferences:
  • EFT Credits for Major Suppliers: 39% of businesses used in 2022
  • Importance of Payment Innovation for Business Health and Growth: 24% of businesses believe it’s extremely important
• Real-Time Payments Interest:
  • Sending Payments in Real-Time: 65% of Canadians interested
  • Receiving Payments in Real-Time: 66% of Canadians interested

Future Outlook

It is evident that the Canadian payment landscape is undergoing transformation. The surge in digital transactions, coupled with evolving consumer trends and preferences, is paving the way for a more inclusive, efficient, and innovative financial ecosystem.

See:  McKinsey Global Payments On Cusp of ‘Decoupled Era’

Emerging payment methods such as “buy now, pay later,” cryptocurrency, and biometric payment technologies are gaining traction, indicating a future where diverse payment options coexist to cater to the varied needs of consumers and businesses alike. The interest in real-time payments further highlights the demand for instantaneous and seamless transactions, a demand that is likely to shape the future of payments in Canada.

The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada’s Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

• SEO Powered Content & PR Distribution. Get Amplified Today.
• PlatoData.Network Vertical Generative Ai. Empower Yourself. Access Here.
• PlatoAiStream. Web3 Intelligence. Knowledge Amplified. Access Here.
• PlatoESG. Carbon, CleanTech, Energy, Environment, Solar, Waste Management. Access Here.
• PlatoHealth. Biotech and Clinical Trials Intelligence. Access Here.
• Source: https://ncfacanada.org/insights-into-canadas-evolving-payments-landscape/