Electronic payments account for 73 percent of all transactions in Canada

Tuesday 10 December 2019 12:49 CET | News

New technology and payments innovation are transforming the way Canadian consumers and businesses make payments, according to data from Payments Canada’s annual Canadian Payments Methods and Trends report. 

In pursuit of more convenient, faster and secure payment experiences, Canadians are rapidly adopting newer digital channels, such as contactless (tapping card or mobile), e-commerce, mobile and online transfers, in favour of more traditional ‘paper and coin’ payments.

The newly released 2019 report analysed the 21.1 billion payment transactions made in 2018, totalling more than USD 9.9 trillion in value. The study points to insights and trends that continue to transform the payments landscape. 

Key findings include:

  • Overall average transaction size grew to USD 468 in 2018, up 22% over five years from 2013.
  • Electronic payments accounted for 73% of total payments volume (number of overall payment transactions), and 59% of total payments value (the combined monetary value of total transactions).
  • Cash payments declined 40% in volume over the last five years. 
  • Contactless payments grew 30% year-over-year from 2017-2018 with a total of 4.1 billion contactless payments (card and mobile) worth USD 129.9 billion at the point-of-sale (POS). 
  • Debit represents almost 60% of volume of these contactless payments - often viewed as a convenient substitute for cash. In fact, debit card use overtook cash for the first time in recent years.
  • Mobile devices were used by nearly 35% of Canadians for contactless payments on a regular basis in 2018, representing a slower uptake than contactless cards. Concerns about security remain the key barrier of usage, with less than a third of consumers expressing their belief that mobile payments are safe and secure.
  • Explosive growth of online transfers, with a 52% year-over-year increase in volume growth from 2017-2018.
  • Debit and credit cards continue to make up the largest portion of total transaction volume, while electronic funds transfers (EFT) and cheque and paper transactions dominate the transaction value. A record three billion EFT transactions demonstrates the confidence businesses have in digital -- and the awareness of the value modern payments can bring for business improvements.
  • Credit card use accelerated dramatically with a 52% increase in transaction volume over the last five years from 2013-2018. Canada currently ranks second with highest volume use of credit cards per capita in the world after South Korea.
  • Credit cards are now on par with debit cards as share of overall payments volumes, at 29% and 28% respectively in 2018. According to the research, continued growth in Canada’s exceptional credit card use is fuelled by two core factors: credit card rewards and the expansion of ecommerce in Canada.
  • Cheque and paper volume represent only 3% of total payment volume in 2018, a 29% decrease over the last five years; however, they represent 39% of total transaction value. 2018 also marked the near completion of migrating from paper cheques to the use of electronic cheques, with 70%  of cheques exchanged electronically.

The Canadian Payment Methods and Trends report was compiled by Payments Canada with the help of payment service providers, payments consultants and researchers to help build an understanding of the Canadian payments landscape in 2018.

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Keywords: contactless, ecommerce, mobile, online transfers, payments , Payments Canada, cards
Categories: Banking & Fintech
Countries: Canada
This article is part of category

Banking & Fintech