New research by Technology Strategies International has revealed that number of consumer payment transactions in Canada is expected to be 1.7 billion transactions lower than in 2019, a decline of 8.1% over the year.
The Canadian Payments Forecast 2020 predicts the decline in consumer payment transactions is a direct consequence of the decline in personal expenditure due to the impact of the COVID-19 pandemic.
The total number of consumer payment transactions is only expected to recover to 2019 levels by the end of 2022, says the report. These developments are likely to have a major and lasting impact on the revenues and profits of key players in the payments industry in Canada.
The report notes that different payment instruments will be impacted differently, with cash experiencing the most significant decline in 2020. Credit card payments are likely to suffer a more significant decline in the short terms than debit cards, but the impact is expected to be short-lived, with substantial growth returning from 2021 onwards.
The report goes on to say that contactless payments, which are experiencing a major boost relative to contact payments during the pandemic, will remain the mechanism of choice for credit card, debit card and mobile payments. There will be pressure on payments companies to make the temporary transaction limit increases instituted during the pandemic permanent. Payment networks and merchants that have not increased transaction limits could see consumers switching their preferred payment mechanism to those that allow higher limits.
The value of international remittances is expected to increase significantly in 2020 as more support payments are sent to family members abroad due to the pandemic.
The increasing popularity of smart watches and fitness trackers is laying the foundation for the nascent wearables payment market, which is expected to develop rapidly over the next five years
The report provides a review, analysis and forecast of consumer payments in Canada. It draws on established statistical sources as well the Canadian Consumer Payments Survey, 2020, conducted by TSI amongst more than 2,000 consumers. The report identifies high growth segments in the Canadian payments market in the context of important recent developments in the economy, technology and the industry. Detailed forecasts are presented for credit card payments, debit card payments, cash payments, cheque payments, contactless payments, prepaid cards, gift cards, P2P payments, remittances, online payments, mobile payments, bill payments and transfers, ABM installations and POS terminals.
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