COVID-19 pandemic dramatically shifts Canadians’ spending habits

75 per cent of Canadians spending less than pre-pandemic; 62 per cent using less cash; 42 per cent avoid shopping at places that don’t accept contactless payments.

OTTAWA, May 13, 2020 - New data from a Payments Canada study on payment trends during COVID-19 reveals some dramatic shifts in Canadians’ payment preferences since the pandemic took affect in Canada. The study compared spending behaviours pre-COVID-19 and at week five of the pandemic, uncovering higher use of contactless payments, electronic payments, e-commerce, online/mobile banking, and lower demand for cash.

Overall, 75 per cent of Canadians reported they were spending less than pre-COVID-19. On average, Canadians left home to go grocery shopping once a week, with 93 per cent indicating they stopped going out completely except for necessities. For those who were leaving their homes, 42 per cent say they avoided shopping at places that did not accept contactless payments, and 52 per cent tried not to exceed the contactless limit when buying something in-store.

“The COVID-19 pandemic has highlighted the convenience of everything digital, from video conferencing, on-demand entertainment, to digital payments,” said Tracey Black, President and CEO of Payments Canada. “Cash and cheque payments have declined dramatically, having been replaced with contactless payments and other types of electronic payments. While we have seen a continued shift towards digital payments over a number of years in Canada, there’s no doubt that the prevailing pandemic has accelerated this shift - and will likely act as a catalyst in transforming the Canadian payment landscape forever.” 

A key driver for this decrease in spending is likely the impact the pandemic has had on Canadians’ personal finances. Nearly half (44 per cent) reported a decrease in income, and 51 per cent said the pandemic  had a negative impact on their retirement savings or other investments. Additionally, 26 per cent of Canadians indicated there had been a negative impact on their ability to pay bills on time.

Beyond the overall reduction in spending, the study also revealed significant shifts in payment methods and buying behaviours since the start of the COVID-19 pandemic:

Using less cash, cheques and prepaid cards. 

• 62 per cent of Canadians reported using cash less than pre-COVID-19. (For additional information on cash use in Canada, see Payments Canada’s annual Canadian Payment Methods and Trends Report.)
• 40 per cent of Canadians who used to be weekly users of cheques were using cheques less frequently.
• 36 per cent reported using prepaid cards less.

Using Interac e-Transfer, PayPal and credit cards more frequently.

• 31 per cent of Canadians who used to be weekly users of Interac e-Transfer reported using Interac e-Transfer more frequently.
• 29 per cent of Canadians who used to be weekly users of PayPal reported an increase in use of PayPal. 
• 28 per cent of Canadians who used to be weekly users of credit cards reported using credit cards more frequently.

Focusing on contactless payment methods.   

With a focus on contactless payments, 53 per cent of Canadians reported using card or mobile tap payment for in-store purchases more often than pre-pandemic. 

Accessing cash.

When it comes to accessing money, the study reports that 61 per cent of Canadians are using ATMs less.

Using e-commerce to purchase more diverse products. 

Canadians are also rethinking where they make purchases, with 38 per cent using e-commerce platforms to get different products more often.

Prioritizing food delivery services and tipping more.  

When it comes to food delivery, 26 per cent of Canadians were using food delivery services such as Uber Eats and Instacart more often than pre-COVID-19, and 29 per cent reported tipping more. 

About the study 

The payment trends during COVID-19 study was compiled by Payments Canada to help build an understanding of how the Canadian payments landscape has shifted in light of the COVID-19 pandemic. In total 1,504 Canadians, 18 years of age or older were interviewed between April 17 to April 19, 2020. The findings in this report are sourced from a Leger\ACS survey, where Payments Canada included some proprietary questions.

About Payments Canada

Payments Canada ensures that financial transactions in Canada are carried out safely and securely each day. The organization underpins the Canadian financial system and economy by owning and operating Canada’s payment clearing and settlement infrastructure, including associated systems, bylaws, rules and standards. The value of payments cleared and settled by Payments Canada in 2019 was over $55 trillion or $218 billion each business day. These encompass a wide range of payments made by Canadians and businesses involving inter-bank transactions, including those made with debit cards, pre-authorized debits, direct deposits, bill payments, wire payments and cheques. Payments Canada is a proud supporter of the Catalyst Accord and the 30% Club.

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