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Consumer Payment Methods - Canada - October 2019

Covered in this report

The evolution of the payments industry continues to be driven by changes in technology and customer behaviour. The emergence of payment systems that are designed to function seamlessly with smartphones and apps has prompted wide-ranging innovation from banks, digital giants and Fintech companies. The volume of digital payments is soaring and that growth brings opportunities for new players and an urgency to innovate for banks and credit unions.

Smartphones are now ubiquitous worldwide, and consumers use them for a multitude of daily transactions, from buying groceries to paying for public transport. And as digital user interfaces have improved for apps and websites, consumers are finding it easy to forgo cash when paying for a wide range of goods and services. The ecosystem now includes digital giants such as Apple and Google, Fintech companies like PayPal and trendsetting online merchants such as Amazon.

This report covers consumer attitudes and behaviours related to different methods of payments. It explores usage of payment types, online and mobile systems by purchase type, attitudes towards payments, motivations to switch preferred payment methods. It also looks at factors preventing usage of newer methods, concerns around security, cryptocurrencies and other general attitudes.


“The looming entry of digital currencies introduced by technology companies and Central Banks will change the payments landscape in ways that are difficult to foresee.”

– Sanjay Sharma, Senior Financial Services Analyst

This report examines the following issues:

  • Credit cards are most favoured for typical purchases
  • Around two in three consumers have used PayPal
  • Around two in three find credit cards the best option for app purchases
  • Over-65s like to have cash even if they don’t use it as often

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Table of contents

  1. Overview

      • Regional classifications
        • Income
        • Executive Summary

            • The issues
              • Credit cards are most favoured for typical purchases
                • Figure 1: Preferred payment type for typical purchases, ranked in top three and first, August 2019
              • Around two in three consumers have used PayPal
                • Figure 2: Usage of online and mobile payment systems, August 2019
              • Around two in three find credit cards the best option for app purchases
                • Figure 3: Attitudes towards cards, August 2019
              • Over-65s like to have cash even if they don’t use it as often
                • Figure 4: Attitudes towards cash, Over-65s vs Overall, August 2019
              • The opportunities
                • Gig economy contributing to the rise of PayPal
                  • Recurring payments can increase customer bonding
                    • Figure 5: Payment methods for bills and recurring payments, August 2019
                  • Assuaging security concerns
                    • Figure 6: General attitudes, August 2019
                  • What it means
                  • The Market – What You Need to Know

                    • The potential impact of cryptocurrencies
                      • Growth in mobile payment infrastructure
                        • Increasing demand for tech privacy and security
                          • Facebook is launching a new cryptocurrency called Libra
                            • Telegram secretly plans 'Gram' cryptocurrency
                              • How 5G Could Change Banking Services
                              • Market Factors

                                • The potential impact of cryptocurrencies
                                  • Participants in the cryptocurrency market
                                    • Drivers of demand for cryptocurrencies
                                      • Growth in mobile payment infrastructure
                                        • Increasing demand for tech privacy and security
                                        • What’s New

                                          • Facebook is launching a new cryptocurrency called Libra
                                            • What is Libra?
                                              • What is Libra’s value proposition?
                                                • How will Libra operate?
                                                  • What’s next?
                                                    • Telegram secretly plans 'Gram' cryptocurrency
                                                    • What’s Next?

                                                      • 5G
                                                        • 5G smartphones are on their way, but not for years
                                                          • Figure 7: 5G: The next generation of possible, March 2019
                                                        • How 5G Could Change Banking Services
                                                          • Wearable devices
                                                            • Data collection and wealth management
                                                            • Key Players – What You Need to Know

                                                              • New oversight framework for payments companies proposed
                                                                • About one million Canadian social insurance numbers compromised
                                                                  • HSBC to open 50-person AI lab in Toronto
                                                                    • Meridian launches digital-only motusbank
                                                                      • Koho rebrands
                                                                      • Industry Developments and Innovations

                                                                        • New oversight framework for payments companies proposed
                                                                          • About one million Canadian social insurance numbers compromised
                                                                            • HSBC to open 50-person AI lab in Toronto
                                                                              • Apple and Goldman launch a credit card
                                                                              • Marketing Campaigns

                                                                                • Meridian launches digital-only motusbank
                                                                                    • Figure 8: motusbank: Our Story, February 2019
                                                                                  • American Express shows support for Vlad Jr.
                                                                                    • Figure 9: American express Canada – Vladimir Guerrero Jr. – We’ve Got Your Back, August 2019
                                                                                  • CIBC goes after seasoned travellers with Aventura
                                                                                    • Koho rebrands
                                                                                    • The Consumer – What You Need to Know

                                                                                      • Credit cards are most favoured for typical purchases
                                                                                        • Around two in three consumers have used PayPal
                                                                                          • Rewards and discounts are the most effective nudges to switch
                                                                                            • Credit cards dominant for large purchases
                                                                                              • Around two in three find credit cards the best option for app purchases
                                                                                                • Around half concerned about mobile payment security
                                                                                                  • Most feel cash will always have a place
                                                                                                  • Preferred Payment Type

                                                                                                    • Credit cards are most favoured for typical purchases
                                                                                                      • Figure 10: Preferred payment type for typical purchases, ranked in top three and first, August 2019
                                                                                                    • Credit cards are favoured by older Canadians
                                                                                                      • Figure 11: Credit cards as preferred payment type for typical purchases (ranked in top three), 18-44s vs over-45s, August 2019
                                                                                                    • Older women more likely to consider store credit cards
                                                                                                      • Customizing loyalty programs to drive usage and become the “card of choice”
                                                                                                        • Debit more likely to be the top choice of younger women
                                                                                                          • Figure 12: Use of debit for typical purchases (#1 rank), by age and gender, August 2019
                                                                                                        • Prepaid still a niche choice
                                                                                                        • Payment Methods by Purchase Type

                                                                                                          • Credit cards dominant for large purchases
                                                                                                            • Figure 13: Payment methods used for large purchases, August 2019
                                                                                                          • Are young women using credit cards for large purchases more out of necessity?
                                                                                                            • Figure 14: Paying using a debit card (select), men 18-34 vs women 18-34, August 2019
                                                                                                          • Direct online payments from bank account used most for recurring payments
                                                                                                            • Recurring payments can increase customer bonding
                                                                                                              • Figure 15: Payment methods for bills and recurring payments, August 2019
                                                                                                            • Credit cards most popular for online purchases
                                                                                                              • Figure 16: Payment methods for online purchases, August 2019
                                                                                                            • Credit cards most used for in-store everyday purchases
                                                                                                              • Figure 17: Payment methods used for in-store everyday purchases, August 2019
                                                                                                            • Cash is most popular for personal payments
                                                                                                              • Figure 18: Payment methods used for personal payments, August 2019
                                                                                                          • Usage of Online and Mobile Payments

                                                                                                            • Around two in three consumers have used PayPal
                                                                                                              • Figure 19: Usage of online and mobile payment systems, August 2019
                                                                                                            • Gig economy contributing to the rise of PayPal
                                                                                                              • Interac E-Transfers used by around half of consumers
                                                                                                                • Mobile payment platforms gaining ground
                                                                                                                  • Figure 20: Usage of online and mobile payment systems (select), 18-44s vs over-45s, August 2019
                                                                                                                  • Figure 21: Usage of online and mobile payment systems (select), by gender, August 2019
                                                                                                              • Motivation to Switch

                                                                                                                • Rewards and discounts are the most effective nudges to switch
                                                                                                                  • Figure 22: Motivation to switch preferred payment type, August 2019
                                                                                                                • Women more attracted by rewards
                                                                                                                  • Figure 23: Motivation to switch preferred payment type (select), by gender, August 2019
                                                                                                                • Ease is the main motivation for over-55s
                                                                                                                  • Figure 24: Motivation to switch preferred payment type (select), by age, August 2019
                                                                                                              • Cash, Cards and Cheques

                                                                                                                • Most feel cash will always have a place
                                                                                                                  • Figure 25: Attitudes towards cash, August 2019
                                                                                                                • Over-65s like to have cash even if they don’t use it as often
                                                                                                                  • Figure 26: Attitudes towards cash (% agree), Over-65s vs overall, August 2019
                                                                                                                • Around two in five have photo-deposited a cheque
                                                                                                                  • Figure 27: Cheque related behaviours, August 2019
                                                                                                                • Around two in three find credit cards the best option for app purchases
                                                                                                                  • Figure 28: Attitudes towards cards, August 2019
                                                                                                                • Majority use cards strategically based on rewards
                                                                                                                • General Attitudes towards Payments

                                                                                                                  • Around half concerned about mobile payment security
                                                                                                                    • Figure 29: General payment attitudes, August 2019
                                                                                                                  • Towards a frictionless store experience
                                                                                                                    • Younger consumers and middle-aged men more receptive to mobile wallets
                                                                                                                      • Figure 30: Interest in using smartphone as a “wallet” (% agree), by age and gender, August 2019
                                                                                                                    • Assuaging security concerns
                                                                                                                      • Figure 31: “I am comfortable with the level of security of mobile payments” (% agree), by age and gender, August 2019
                                                                                                                    • Cryptocurrencies have limited appeal among older Canadians
                                                                                                                      • Figure 32: “I am interested in using cryptocurrencies for purchases (% agree), by age and gender, August 2019
                                                                                                                  • Appendix – Data Sources and Abbreviations

                                                                                                                    • Data sources
                                                                                                                      • Consumer survey data
                                                                                                                        • Abbreviations and terms

                                                                                                                        Consumer Payment Methods - Canada - October 2019

                                                                                                                        £3,435.47 (Excl.Tax)