Payments Canada report says nearly 75% of all payments are digital, and online transfers surge

Debit and credit card use in Canada still reign supreme, Payments Canada recently revealed in its annual Canadian Payment Methods and Trends report.

Payments Canada provided an insight into both year-on-year and five-year payment methods and trends in Canada, analyzing over 21 billion payment transactions made in 2018.

The data reveals that credit and debit cards still make up the largest portion of the total transaction volume in Canada, while cheque and paper transactions and electronic funds transfers (EFT) still dominate the overall transaction value. The report also revealed that Canada ranks second with the highest volume of credit cards per capita in the world after South Korea. 

Evolving technology, as well as industry innovation, are among the driving forces that are accelerating the transformation of the payment environment in Canada, said Cyrielle Chiron, head of research and strategic foresight at Payments Canada. Fuelled by business and consumer demands for fast and secure payments, the aforementioned two forces are changing the game, said Chiron.

“There has been a remarkable transition from paper-based to digital payments over the last five years, but there is still a huge opportunity and need to advance Canada’s payments landscape,” Chiron said in the report. “Looking to the future, our modernization program is laying the groundwork to ensure Canadian consumer and business needs for more control, convenience and affordable payments, are met.”

Electronic payments accounted for 73 per cent of total payments volume in 2018. Since 2013, debit and credit card based transactions have been the biggest beneficiaries, each making major strides in mostly their volumes of contactless payments. 

Canadians transact in two very different environments: Remote payment and point-of-sale (POS) environments, with POS becoming increasingly oriented towards e-commerce and mobile devices, the report explains.

The payments market in the country grew to 21.1 billion business and consumer transactions, amounting to $9.8 trillion, in the year 2018. The average transaction size grew to $468 in 2018, up 22 per cent from 2013. 

The remote payment environment

Remote transactions contributed 91 per cent of the total Canadian transaction value ($9 trillion) in the country in 2018. However, these transactions represent only 25 per cent of the total transaction volume (4.5 billion). 

All transactions that are not made at online payee and brick and mortar payee locations fall under remote transactions. Instead, payors make use of payment service providers or financial institutions as intermediaries that accept payment instructions and use their services to move funds to intended payees. These include online bill payments made from deposit accounts, pre-authorized payments and direct deposits. 

  • Online transfers grew by 44 per cent in value and 52 per cent in volume, thereby continuing to be the fastest-growing channel of payment.
  • Once again, EFT transactions were the leading payment type both in terms of value and volume, thereby dominating the remote environment. 
  • Personal cheque use decline was high, both in terms of value and volume. 
  • For the first time, online transfers use continued to climb above personal cheque use. 

The POS environment

A total of 15.7 billion POS payments took place in 2018, amounting to more than $856 billion. 

All transactions that are made at online payee and brick and mortar payee locations fall under POS transactions. These transactions include in-app and other e-commerce transactions. 

  • Cash payments declined 40 per cent in volume over the last 5 years. Cash continued its sharp decline in 2018, is volume shrinking by more than nine per cent – losing more ground to card payments at the POS. 
  • Growth of the volume of prepaid card (including virtual and plastic cards) continued to be almost double the combined growth rate of debit and credit card (nine per cent vs. five per cent) as Canadians used more prepaid cards in 2018, particularly for e-commerce.
  • Debit cards continued to be the most widely used payment method with six billion debit transactions. 
  • Credit cards continued to remain the second most used method of POS payment in the volume of transactions and their transaction value was more than the value of other methods of POS payment combined. 
  • Contactless payments grew 30 per cent year-over-year from 2017 to 2018, with a total of 4.1 billion contactless payments. 

Nearly 35 per cent of Canadians used mobile devices for contactless payments in the year 2018, representing a slower uptake than contactless cards. Concerns about security remain the key barrier of usage, the report says, with less than a third of consumers expressing their belief that mobile payments are safe and secure.



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Pragya Sehgal
Pragya Sehgal
Born and raised in the capital city of India - Delhi - bounded by the river Yamuna on the west, Pragya has climbed the Himalayas, and survived medical professional stream in high school without becoming a patient or a doctor. Pragya now makes her home in Canada with her husband - a digital/online marketing fanatic who also loves to prepare beautiful, healthy and delicious meals for her. When she isn’t working or writing around tech, she’s probably watching art films on Netflix, or wondering whether she should cut her hair short or not. Can be contacted at [email protected] or 647.695.3494.

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