It’s been said that “cash is king,” but it’s rapidly becoming a pauper: according to the latest Payments Canada report, cash payment volumes have declined 40% over the past five years as more Canadians are turning to digital payment methods.
The Canadian Payments Methods and Trends Report was compiled based on data from payment service providers, payments consultants and researchers, covering 21.1 billion transactions in 2018, totaling more than $9.9 trillion in value. It found that electronic payment methods – which include contactless, mobile and online transfers – now account for 73% of overall transactions (referred to in the report as payment volume), representing 59% of the total monetary value of transactions (referred to as payment value).
According to Cyrielle Chiron, Payments Canada’s head of research and strategic foresight, “evolving technology and industry innovation are changing the game, fueled by consumer and business demands for friction-free, fast and secure payments.”
The Payments Canada report found that contactless payments made at point of sale have grown 30% year-over-year, representing $129.9 billion in value. Among those contactless payments, mobile devices were used by 35% of Canadians on a regular basis. That’s a slower uptake than contactless “tap” cards, with security concerns being a key barrier, with less than a third of consumers expressing their belief that mobile payments are safe and secure.
Online transfers have grown in volume by 52%, the fastest-growing payment segment, with the report finding that four million Canadians registered for Interac e-transfer’s Autodeposit feature. Mobile devices have a role here too, as they are becoming the channel of choice for completing this transfers, with 35% of consumers using them regularly for payments.
Credit cards are now on par with debit cards as share of overall payments volumes, but prepaid cards (including plastic and virtual cards offered by several fintech startups) volume growth continued to be nearly double the combined growth rate of debit and credit cards.
