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Consumer Payments and Credit Cards - Canada - November 2017

“Awareness of debit card rewards is not high but there are segments that prefer debit so banks can use an attractive rewards program as a first time relationship builder.”
– Sanjay Sharma, Senior Financial Services Analyst

This Report looks at the following areas:

  • Credit and cash are the most popular payment methods
  • TD is the most popular choice for debit; TD & RBC are the leading issuers of credit cards
  • Around one in four 18-24s would prefer to use debit exclusively 
  • Men over-55 more likely to exceed $2,000 in monthly credit card spending
  • Young males more willing to pay a higher fee for better credit card rewards

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Table of contents

  1. Overview

      • Regional classifications
        • Income
        • Executive Summary

            • The issues
              • Credit and cash are the most popular payment methods
                • Figure 1: Payment methods used, August 2017
              • TD is the most popular choice for debit; TD & RBC are the leading issuers of credit cards
                • Figure 2: Choice of FI for debit and credit cards, August 2017
              • Around one in four 18-24s would prefer to use debit exclusively
                • Figure 3: Agreement with statements related to debit card usage (% agree), August 2017
              • Men over-55 more likely to exceed $2,000 in monthly credit card spending
                • Figure 4: “My average credit card monthly spend exceeds $2,000” (% agree), August 2017
              • Young males more willing to pay a higher fee for better credit card rewards
                • Figure 5: Agreement with statements related to credit card rewards, August 2017
              • The opportunities
                • Debit can be the starting point of a lifelong relationship
                  • Figure 6: Agreement with statements related to debit card rewards, (% agree), August 2017
                • Three in five consumers prefer to use the card offered by their main FI
                  • Figure 7: Agreement with statements about credit cards, August 2017
                • Building a win-win relationship with high credit card spenders
                  • Figure 8: Agreement with statements related to credit card usage (% agree), 18-44s vs over-45s, August 2017
                • What it means
                • Market Factors – What You Need to Know

                  • Canada’s population is aging
                    • Canada will become increasingly diverse
                      • Growth in smartphone ownership a boon for mobile banking
                        • Financial concerns can lead to cautious spending habits
                          • High participation in loyalty programs drives credit card ownership
                            • Awareness of mobile payment high; cryptocurrencies is lower
                            • Market Factors

                              • Canada’s population is aging
                                • Figure 9: Canadian population, by age, 2016
                              • Canada will become increasingly diverse
                                • Growth in smartphone ownership a boon for mobile banking
                                  • Financial concerns can lead to cautious spending habits
                                    • High participation in loyalty programs drives credit card ownership
                                      • Figure 10: Loyalty program participation, by industry, June 2017
                                    • Awareness of mobile payment high; cryptocurrencies is lower
                                      • Figure 11: Awareness and usage of digital tools related to payments, March 2017
                                  • Key Players – What You Need to Know

                                    • CIBC and PC Financial end partnership; CIBC to rebrand digital bank as Simplii
                                      • Equifax breach has a Canadian impact
                                        • China's Alibaba bringing online payment platform AliPay to Canada
                                          • Venmo testing physical debit card
                                            • PayPal debuts a credit card that offers 2% cash back
                                              • Apple’s new money transfer service Apple Pay Cash to launch in late fall 2017
                                                • Uber launches credit card
                                                • Industry Developments and Innovations

                                                  • Canadian developments and innovations
                                                    • CIBC and PC Financial end partnership; CIBC to rebrand digital bank as Simplii
                                                      • Canadian startup STACK partners with MasterCard
                                                        • China's Alibaba bringing online payment platform AliPay to Canada
                                                          • RBC launches two new iOS payment options
                                                            • Equifax breach has a Canadian impact
                                                              • International developments and innovations
                                                                • Venmo testing physical debit card
                                                                  • PayPal debuts a credit card that offers 2% cash back
                                                                    • Mobile wallet Curve launches 'time travel' tool to let you 'shop in the past'
                                                                      • Petal announces new credit card that does not require credit scores
                                                                        • Apple’s new money transfer service Apple Pay Cash to launch in late fall 2017
                                                                          • Samsung Pay expands in Canada with new partners
                                                                            • Uber launches credit card
                                                                            • Marketing Campaigns

                                                                              • Interac gets consumers to open up to tapping
                                                                                • Figure 12: Interac – Open up to flash, September 2017
                                                                              • American Express targets Millennial life
                                                                                • Figure 13: The NEW American Express Cobalt Card – You Do You, September 2017
                                                                              • Selected campaigns from Mintel Comperemedia
                                                                                • RBC offers an Apple Watch or iPhone
                                                                                  • Figure 14: RBC new customer gift, email advertisement, October 2017
                                                                                • BMO ATM’s make your life easier
                                                                                  • Figure 15: BMO’s ATM email advertisement, October 2017
                                                                              • The Consumer – What You Need to Know

                                                                                • Credit and cash are the most popular payment methods
                                                                                  • TD is the most popular choice for debit; TD & RBC are the leading issuers of credit cards
                                                                                    • Awareness of debit rewards is not high
                                                                                      • Around three in ten would prefer to use debit exclusively
                                                                                        • Men over-55 more likely to exceed $2,000 in monthly spending
                                                                                          • Younger women are particularly stressed about unpaid card balances
                                                                                            • Young males more willing to pay a higher fee for better credit rewards
                                                                                            • Payment Methods Used

                                                                                              • Credit and cash are the most popular payment methods
                                                                                                  • Figure 16: Payment methods used, August 2017
                                                                                                • Older Canadians more likely to prefer “traditional” payment methods
                                                                                                  • Figure 17: Payment methods used, 18-44s vs over-44s, August 2017
                                                                                                • Women have different payment preferences
                                                                                                  • Figure 18: Payment methods used (select), men vs women, August 2017
                                                                                                • Asian Canadians less likely to use debit
                                                                                                  • Figure 19: Payment methods used (select), Asian Canadians vs overall population, August 2017
                                                                                              • Choice of Financial Institution for Debit and Credit Cards

                                                                                                • TD is the leading debit card issuer
                                                                                                  • Figure 20: Choice of FI for debit cards, August 2017
                                                                                                • Desjardins is the leading debit card issuer in Quebec
                                                                                                  • Figure 21: Choice of FI for debit cards, Quebec vs overall population, August 2017
                                                                                                • TD and RBC are the leading choices for credit cards
                                                                                                  • Figure 22: Choice of FI for credit cards, August 2017
                                                                                                • PC Financial more popular among women, Amex among men
                                                                                                  • Figure 23: PC Financial and Amex credit cards, men vs women, August 2017
                                                                                                • Regional differences are significant
                                                                                                  • Figure 24: Choice of FI for credit cards, Quebec vs overall population, August 2017
                                                                                                • TD’s strength among 18-24s
                                                                                                • Debit and Credit Card Usage

                                                                                                  • Debit card usage
                                                                                                    • Over one third of 18-24s would prefer to use debit exclusively
                                                                                                      • Figure 25: Agreement with statements related to debit card usage, (% agree), August 2017
                                                                                                    • Younger consumers relatively more likely to use multiple debit cards
                                                                                                      • Figure 26: Agreement with statements related to debit card usage (% agree), men vs women, August 2017
                                                                                                    • Credit card usage
                                                                                                      • Three in five consumers prefer to use the card offered by their main FI
                                                                                                        • Figure 27: Agreement with statements about credit cards, August 2017
                                                                                                      • Men over-55 more likely to exceed $2,000 in monthly spending
                                                                                                        • Figure 28: “My average credit card monthly spend exceeds $2,000” (% agree), by age and gender, August 2017
                                                                                                      • Around a third of 18-34s have used a prepaid card
                                                                                                        • Younger consumers more likely to prefer debit
                                                                                                          • Figure 29: Agreement with select statements related to credit card usage (% agree), by age, August 2017
                                                                                                        • Older card holders more prolific and responsible users
                                                                                                          • Figure 30: Agreement with statements related to credit card usage (% agree), 18-44s vs over-45s, August 2017
                                                                                                        • Chinese Canadians are much more likely to prefer credit over debit cards
                                                                                                          • Figure 31: Agreement with select statements about credit card usage (% agree), Chinese Canadians vs overall population, August 2017
                                                                                                      • Debit and Credit Card Rewards

                                                                                                        • Awareness of debit rewards is not high
                                                                                                          • Figure 32: Agreement with statements related to debit card rewards, (% agree), August 2017
                                                                                                        • Younger users more willing to pay more for better debit rewards
                                                                                                          • Figure 33: Agreement with statements related to debit card rewards (% agree), 18-44 vs over-45s, August 2017
                                                                                                        • Scotia debit customers are more aware of debit rewards
                                                                                                          • Figure 34: Agreement with statements related to debit card rewards (% agree), August 2017
                                                                                                        • Debit can be the starting point of a lifelong relationship
                                                                                                          • Young males more willing to pay a higher fee for better credit card rewards
                                                                                                            • Figure 35: Agreement with statements related to credit card rewards, August 2017
                                                                                                          • PC Financial customers are more “functional” users
                                                                                                            • Figure 36: Agreement with statements related to credit card rewards (% agree), August 2017
                                                                                                          • Around a third of PC Financial card customers have a “black” card
                                                                                                            • Figure 37: Agreement with statement related to credit card usage (% agree), Desjardins vs PC Financial credit card customers, August 2017
                                                                                                        • Credit Card Spending and Security

                                                                                                          • Younger women are particularly stressed about unpaid card balances
                                                                                                            • Figure 38: Agreement with statements about credit cards, August 2017
                                                                                                          • Men are more interested in paying for balance protection insurance
                                                                                                            • Figure 39: Agreement with statements about credit cards, August 2017
                                                                                                          • Men and younger consumers more likely to be influenced by non-reward benefits
                                                                                                            • Around three in five consumers agree liability protection enhances safety
                                                                                                              • Figure 40: Agreement with statements about credit cards, August 2017
                                                                                                          • Appendix – Data Sources and Abbreviations

                                                                                                            • Data sources
                                                                                                              • Consumer survey data
                                                                                                                • Consumer qualitative research
                                                                                                                  • Abbreviations and terms

                                                                                                                  Companies Covered

                                                                                                                  To learn more about the companies covered in this report please contact us.

                                                                                                                  Consumer Payments and Credit Cards - Canada - November 2017

                                                                                                                  US $3,995.00 (Excl.Tax)