2021
8
Canada Consumer Payments Market Report 2021
2021-09-30T04:20:47+01:00
OX1047839
3695
142932
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Report
en_GB
“Mobile payment systems are gaining traction with younger consumers while debit rewards are expanding along with the use of debit for online purchases but credit cards reign supreme as the…

Canada Consumer Payments Market Report 2021

£ 3,695 (Excl.Tax)

Report Summary

“Mobile payment systems are gaining traction with younger consumers while debit rewards are expanding along with the use of debit for online purchases but credit cards reign supreme as the dominant payment method.”
– Sanjay Sharma, Senior Financial Services Analyst

Key issues covered in this Report

  • The impact of COVID-19 on consumer payments.
  • This Report covers consumer attitudes and behaviour related to different methods of payments. It also explores the payment methods used, usage of online/mobile payment systems, reasons for preferring different payment types, factor payment innovations and attitudes about payments.

Table of Contents

  1. Overview

    • What you need to know
      • Key issues covered in this Report
      • Executive Summary

          • Top takeaways
            • Market overview
              • Impact of COVID-19 on consumer payments
                • Figure 1: Short-, medium- and longer-term impact of COVID-19 on consumer payments, September 2021
              • Opportunities
                • A fifth use a debit card with rewards
                  • Young men most fascinated by cryptocurrencies
                    • Rewards are a major driver of credit card use
                      • The prepaid and secured card market opportunity
                        • Challenges
                          • Contradictory views on credit card security
                            • Is the BNPL hype fading?
                            • The Market – Key Takeaways

                              • Cryptocurrencies
                                • Central Bank Digital Currencies soon to be an option
                                  • Bitcoin as a national currency
                                    • PayPal launches new service enabling users to buy, hold and sell cryptocurrency
                                      • BNPL carves a niche in the payments ecosystem
                                        • Square buys Buy Now, Pay Later giant, Afterpay
                                          • Amazon and Affirm join forces
                                            • Scotiabank becomes the third ‘big five bank’ to offer its own BNPL option
                                            • What’s New?

                                              • Cryptocurrencies
                                                • Central Bank Digital Currencies soon to be an option
                                                  • Bitcoin as a national currency
                                                    • PayPal launches new service enabling users to buy, hold and sell cryptocurrency
                                                      • Facebook-backed digital currency project revamps
                                                        • BNPL carves a niche in the payments ecosystem
                                                          • Square buys Buy Now, Pay Later giant, Afterpay
                                                            • Amazon and Affirm join forces
                                                              • Scotiabank becomes the third ‘big five bank’ to offer its own BNPL option
                                                                • Royal Bank of Canada moves into BNPL market
                                                                  • PayPal’s instalment plan (US)
                                                                    • Apple Pay Later may launch soon (US)
                                                                      • Visa Installments rolling out in Canada…
                                                                        • …MasterCard partnership with TSYS
                                                                          • Capital One stops ‘risky’ buy now pay later credit card transactions
                                                                          • Companies and Brands – Key Takeaways

                                                                            • Financial inclusion: new services for underbanked Canadians
                                                                              • OneFeather brings financial services to Indigenous communities
                                                                                • Canada Post and TD enter strategic alliance to expand access to financial services
                                                                                  • New apps and services
                                                                                    • Pay day advance apps enter the Canadian market
                                                                                      • Wealthsimple launches peer-to-peer payment app
                                                                                        • Wealthsimple expands crypto offering
                                                                                        • Companies and Brands – New Entrants

                                                                                          • Financial inclusion: new services for underbanked Canadians
                                                                                            • OneFeather brings financial services to Indigenous communities
                                                                                                • Figure 2: OneFeather Instagram post, July 2021
                                                                                              • Canada Post and TD enter strategic alliance to expand access to financial services
                                                                                                • Lili: neobank targeting freelance and gig workers (US)
                                                                                                  • New apps and features
                                                                                                    • Pay day advance apps enter the Canadian market
                                                                                                      • Figure 3: payactiv Instagram post, August 2021
                                                                                                    • Wealthsimple launches peer-to-peer payment app
                                                                                                        • Figure 4: Wealthsimple Cash Facebook Ad, June 2021
                                                                                                    • The Consumer – Key Takeaways

                                                                                                      • Credit cards most widely used
                                                                                                        • Mobile payments still to gain significant traction
                                                                                                          • COVID-19 has changed payment and banking behaviours
                                                                                                            • Rewards are a major driver of credit card use
                                                                                                              • Usage and interest in other newer products
                                                                                                              • Payment Methods

                                                                                                                • Credit, debit and cash widely used for in-person purchases
                                                                                                                  • Figure 5: In-person payment methods used, 2021
                                                                                                                • Younger consumers have a higher usage of debit, prepaid and secured cards
                                                                                                                  • Figure 6: In-person payment methods used, by age, 2021
                                                                                                                • The prepaid and secured card market opportunity
                                                                                                                  • Figure 7: Capital One secured MasterCard Facebook ad, March 2021
                                                                                                                • Chinese Canadians love credit cards
                                                                                                                  • Figure 8: In-person payment methods used, Chinese Canadians vs overall, 2021
                                                                                                                • Credit cards are the overwhelming favourite for online purchases
                                                                                                                  • Figure 9: “Meet Visa”, July 2021
                                                                                                                  • Figure 10: Online payment methods used, 2021
                                                                                                                • Younger consumers have a higher usage of debit, prepaid, secured and cryptocurrencies for online purchases
                                                                                                                  • Figure 11: Online payment methods used, by age, 2021
                                                                                                              • Online and Mobile Payment Systems

                                                                                                                • Mobile payments still to gain significant traction
                                                                                                                  • Figure 12: Payment systems used in the past year, 2021
                                                                                                                • Interac Debit used more by younger consumers
                                                                                                                  • Figure 13: Payment systems used in the past year (select), by age, 2021
                                                                                                                • Younger consumers are keener users of Apple and Google Pay
                                                                                                                    • Figure 14: Payment systems used in the past year (select), by age, 2021
                                                                                                                  • Apple Pay Cash and Google Pay P2P still to gain users
                                                                                                                    • Figure 15: Payment systems used in the past year (select), by age, 2021
                                                                                                                  • Young men have a higher usage of some payment systems
                                                                                                                    • Figure 16: Payment systems used in the past year (select), by age and gender, 2021
                                                                                                                  • What does the future hold? While Big Tech broadens its reach…
                                                                                                                    • … global Fintechs aim to expand into super-apps
                                                                                                                    • Impact of COVID-19

                                                                                                                      • COVID-19 has changed payment and banking behaviours
                                                                                                                        • Figure 17: Impact of Covid-19 on payments, 2021
                                                                                                                      • Will cash usage remain lower after the pandemic ends?
                                                                                                                        • Branch visits take a hit
                                                                                                                          • The post COVID-19 future of bank branches
                                                                                                                            • Younger consumers more likely to have increased their usage of prepaid/secured cards
                                                                                                                              • Figure 18: Impact of Covid-19 on payments (select), by age, 2021
                                                                                                                            • COVID-19 is accelerating the digital transformation
                                                                                                                              • Cheques continue to decline in use
                                                                                                                                • Travel rewards have been hit by the pandemic but few have switched
                                                                                                                                  • Figure 19: RBC Avion Facebook Ad, August 2021
                                                                                                                                  • Figure 20: Avion Forgotten Suitcase, August 2021
                                                                                                                              • Attitudes towards Credit Cards

                                                                                                                                • Rewards are a major driver of credit card use
                                                                                                                                  • Figure 21: Attitudes towards credit cards (select), 2021
                                                                                                                                • Younger consumers more likely to consider embedded benefits
                                                                                                                                  • Figure 22: Attitudes towards credit cards (select), by age, 2021
                                                                                                                                • Strong interest in Apple or Google Card among younger consumers
                                                                                                                                  • Figure 23: Apple card (US) mobile display ad, June 2021
                                                                                                                                • Older consumers less likely to feel that physical cards will be obsolete
                                                                                                                                  • Contradictory views on credit card security
                                                                                                                                    • Figure 24: Specific concerns around credit card security (select), 2021
                                                                                                                                    • Figure 25: Equifax credit monitoring Facebook Ad, July 2021
                                                                                                                                • Payment Innovations

                                                                                                                                  • Majority confused with the payment options available
                                                                                                                                    • Figure 26: Payment innovations (select), 2021
                                                                                                                                  • Half of 18-34s have used a new payment app in the past year
                                                                                                                                    • Figure 27: “I have used a new payment app in the past year” (% agree), by age and gender, 2021
                                                                                                                                    • Figure 28: Introducing Wealthsimple Cash, March 2021
                                                                                                                                  • A third of 18-34s have switched to mobile payments
                                                                                                                                    • Figure 29: Payment innovations, by age, 2021
                                                                                                                                  • A fifth prefer tech companies for payments rather than banking
                                                                                                                                    • Figure 30: Openness to using tech companies for payments other than banking, by age and overall, 2021
                                                                                                                                  • One in 20 has used a bill-splitting app
                                                                                                                                    • Figure 31: “I have use a bill-splitting app”, by age and overall, 2021
                                                                                                                                  • Limited interest in using cryptocurrencies as payment
                                                                                                                                    • Figure 32: Cryptocurrency related attitudes, 2021
                                                                                                                                  • Young men most fascinated by cryptocurrencies
                                                                                                                                    • Figure 33: Interest in cryptocurrency usage (% agree), by age and gender, 2021
                                                                                                                                    • Figure 34: Investing For Beginners: The Best Ways to Start Picking Stocks, February 2020
                                                                                                                                    • Figure 35: Mogo Wallet Bitcoin Facebook Ad, February 2021
                                                                                                                                    • Figure 36: Mogo Bitcoin cashback Facebook Ad, August 2021
                                                                                                                                • General Attitudes towards Payments

                                                                                                                                  • A fifth use a debit card with rewards
                                                                                                                                    • Figure 37: Debit card behaviours, 2021
                                                                                                                                    • Figure 38: Big five banks debit/chequing rewards programs, August 2021
                                                                                                                                    • Figure 39: Scotiabank, CIBC and RBC Rewards Facebook ads, June 2021
                                                                                                                                  • Limited interest in BNPL
                                                                                                                                    • Figure 40: Interest in and usage of BNPL, 2021
                                                                                                                                • Appendix – Data Sources and Abbreviations

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

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