Canadians’ use of digital, mobile and prepaid payment methods has jumped 14% over the last two years, according to new research from the Canadian Prepaid Providers Organization (CPPO), leading to higher expectations for a “faster, frictionless experience.”

The “How Canadians Pay Today” report was commissioned by the CPPO, which represents the prepaid payments industry in Canada. The report includes responses from more than 1,500 Canadians surveyed online in November and was conducted by research firm Leger. The CPPO deals specifically with “open-loop prepaid payments,” non-credit-based electronic transactions. They include Google Pay, Apple Pay, prepaid cards and other forms of mobile payments.

The study revealed that Canadians remain loyal to credit and debit cards, but a shrinking reliance on cash and checks has led to growth in alternative payment tools since 2016, especially among younger Canadians. Growth in the sector is being driven by convenience, cost-savings and a growing interest in apps that help consumers remain on budget.

Credit and debit cards remain the most frequently used among Canadians at 40% and 33%, respectively. Cash is the third-most used at 18% of respondents. However, the number of people who have started transacting through other payment tools has risen to 73%, up from 59% in 2016. Those alternative methods include use of PayPal (55%), prepaid cards (27%), Apple Pay (11%), Google Pay (7%), and other mobile payments (7%), with the fastest growth happening in prepaid cards. Their use has increased by 7% since 2016.

“As Canadians increasingly opt for non-traditional banking solutions, they are raising the bar for a faster, frictionless experience and added convenience in the entire payments industry,” said CPPO chairman Peter Read in a statement. “Prepaid has emerged as a popular foundation for innovations in bank account replacement, money transfer, in-app payments and more.”

Moreover, consumers’ move away from cash appears to be accelerating, with 65% saying they made fewer cash purchases in 2018 than the year before, compared to 58% in 2016. The vast majority of Canadians continue to have a bank account. However, 29% of respondents expressed a desire to “sidestep” traditional banking methods in favour of new tools, primarily for reasons of cost-saving and convenience.

The survey uncovered that one in four Canadians are finding it hard to stay within budget, and as a result, are turning to tools and apps for help, including track spending apps (46%), budgeting apps (43%), and reloadable prepaid cards free of interest charges and overdraft fees (34%). Thirty-one percent make use of apps to manage their finances and nearly half of those with children under 18 years old would give their children a spending allowance on a prepaid card to help monitor their spending.