Canadians are generally known for being more conservative when it comes to trusting and adopting new technology, but a new study by Ipsos and commissioned by PayPal Canada reveals just how far behind many of them really are.

The report found that majority of small and medium-sized businesses (SMBs) in Canada are not leveraging the power of e-commerce, with only a mere 17 per cent using digital payment tools such as electronic invoicing, online marketplaces, or an e-commerce enabled website.

The study interviewed 1,000 Canadian small business owners between December 2015 and January 2016, and found that not only did 83 per cent of SMBs not accept any form of online or mobile payment, but that 71 per cent of this group said they would never consider going digital at all.

“A thriving e-commerce environment in Canada can lead to greater trade, employment and income opportunities,” Paul Parisi, president of PayPal Canada, says in a May 9 press release. “As a digital payments leader, we at PayPal, are focused on offering solutions that benefit our 250,000 small business customers across the country and we are actively collaborating with ecosystem players to help grow Canada’s digital economy.”

The report highlights the fact that Canadian e-commerce spending is forecasted to reach $42 billion by 2018, and on a global level, this figure is expected to hit $27 trillion by 2020. With 80 per cent of Canadians shopping online in 2015, PayPal says that SMBs are missing out on a whole stream of revenue.

“Businesses that accept online payments as a complement to their offline revenue stream reported an average revenue of $175,000, which is more than double businesses that operate without online payment capabilities ($80,000). Businesses that only accept payments online reported an average revenue of $150,000,” it explains.

One of the first steps towards embracing e-commerce is creating a website, PayPal writes, but at the moment, only seven per cent of Canadian SMBs have a website capable of processing online payments. Even more concerning is that 34 per cent of businesses that do not currently accept online payments have no future plans to build a website.

But what’s holding them back?

This unwillingness from many businesses to move digital is not without cause, however. The major issue highlighted by Canadian SMBs is whether these technologies will be able to provide the same level of service as traditional methods (30 per cent), followed by concerns surrounding online fraud (21 per cent), distribution or delivery issues (19 per cent), and a limited understanding of technology (19 per cent).

Expanding on this, the report notes that almost three-quarters (72 per cent) of offline businesses claim that they are “not particularly sophisticated in terms of technology and e-marketing knowledge.”

This may have something to do with the demographics of Canadian SMB owners, PayPal suggests. The report found that 67 per cent of owners are men and 63 per cent of them are 55 years of age or older. This point is validated even further when looking at the businesses who are e-commerce enabled: 77 per cent of SMB owners with both online and offline (in-store) payment options, and 66 per cent of businesses accepting only online payments, are under the age of 55.

With the latest federal budget placing a special focus on innovation and tech, including dedicated funding for sectors such as artificial intelligence and e-commerce, the Canadian government is hoping to convince businesses that going digital is worth it.

“Virtually every sector of the economy is rapidly being reshaped by technology,” says the Honourable Navdeep Bains, Canada’s Minister of Innovation, Science and Economic Development, in the press release. “In a global and digital economy that allows consumers to purchase goods and services from anywhere in the world, more Canadian businesses should invest in the development and adoption of new technologies. That’s how Canadian businesses will remain globally competitive and create well-paying jobs for the middle class.”

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