Canadians want payment choices moving forward

This article was originally published by innovatingcanada.ca on September 27, 2024.

By Stephen Yun, Senior Analyst, Market Insights, Payments Canada

Stephen's areas of focus include the Consumer Payment Methods and Trends and Payment Behaviour Tracking studies, and leveraging research insights to create a consumer/business payment narrative and drive business action for his business partners. Stephen has more than 20 years of experience leading marketing and customer experience research. He holds MBA and BBA degrees from the Schulich School of Business (York University) specializing in marketing and finance.

Canadians desire payment options that make their lives easier, whether digital or non-digital.

Each year, Payments Canada provides an overview of the retail payment trends observed nationally through the publication of the Canadian Payment Methods and Trends report. This year’s report  (available October 2024) reveals key themes around the growth of digital payment options and Canadians’ continued interest in traditional ways to pay.

Embracing innovation

Some of the innovations influencing the purchasing behaviours and preferences of Canadians include real-time payments, generative artificial intelligence (GenAI) and contactless payment technology.

The majority of Canadians (60 per cent) would send real-time payments if the option was available. The top three payment situations for sending money in real-time include sending money to an individual or business when the payment amount exceeds their daily Interac e-Transfer amount limit (20 per cent), paying a credit card bill (19 per cent) and paying household expenses such as water, electricity, phone and internet (17 per cent).

Almost one in two businesses (49 per cent) intend to use GenAI to make their operations and processes more efficient. The top three GenAI applications perceived to benefit businesses most are cited as fraud detection and prevention (44 per cent), automating payment processing (37 per cent) and creating personalized customer experiences (29 per cent).

Contactless payment options like wearables (for example, fitness trackers and smartwatches) were used to initiate 44 million payment transactions in 2023, totalling $1.1 billion. More than one in ten Canadians (13 per cent) use smart home devices and social media to make purchases.

Holding onto cash

While Canadians are embracing new payment options, they still want choice and flexibility. Despite the declining trend in cash usage, over half of Canadians (55 per cent) indicated no desire to go completely cashless.

Cash is still a preferred payment choice because it is widely accepted (38 per cent), fast (37 per cent), you can use your own funds (26 per cent), it’s easier and more convenient than other payment methods (21 per cent) and it’s easier to control and keep track of (21 per cent).

Finally, 63 per cent of Canadians would still use cash if a digital Canadian dollar was introduced. Although the use of digital payments among Canadians continues to grow, the end of cash is still far off.

Building a financial future that meets the unique needs of Canadians

Canadian consumers and businesses have made it clear that when it comes to payments, convenience, efficiency, security, privacy and low costs are vital to them.

We continue to see an increased demand for more digital payment options and frictionless payment experiences that address these needs. However, Canadians also want continued access to tried and true payment options due to their ease of use and dependability.

Understanding Canadians' unique payment attitudes and behaviours is critical to ensure we create a financial future that benefits all Canadians. To learn more about the way Canadians pay and get paid, visit our research page.