Bank of Canada: Cash and card payments still high among Canadians

Bank of Canada: Cash and card payments still high among Canadians
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Canadian consumers’ payments preferences have changed little over recent years according to the Bank of Canada, which found continued demand for cash and debit card payments.

The bank’s report into Canadian payment methods in 2023 focused on what it called ‘the resilience of cash’, noting that cash usage by Canadian consumers has remained stable over the past several years.

One in five purchases were made with cash in 2023, similar to estimates from the 2020-22 period. Cash accounted for 11% of the value of all purchases, also similar to previous years. 

However, although cash usage remains stable in Canada, credit and debit cards continue to account for the majority of consumers’ purchases. Contactless payments in particular are popular, similar to in other Western nations.

Debit card ownership is ‘nearly universal’ among adult Canadians, according to Canada’s central bank. In total, 98% of Canadians stated that they owned a debit card in 2023, a consistent trend since 2009, with credit card ownership standing consistently at around 89% since 2017.

This is not to say that Canadians have an aversion to alternative payment methods (APMs), although these are still used significantly less than the mainstays of cards. The Bank of Canada lists Interac e-Transfer, online payment accounts, cryptocurrency and mobile app payments as notable APMs popular with segments of Canadians.

The most popular method is e-transfer, with around 58% of Canadians using it in the past year, an increase of 7% from 2022. Online payment accounts like PayPal follow at around 35% of consumers.

Mobile app usage has been divided across four key metrics – bank account apps like TD Bank or Scotiabank, digital wallet apps like Apple Pay and Google Pay, payment account apps like PayPal and store-branded prepaid cards like Starbucks apps.

In total, 45% of Canadians reported using a mobile payments app in 2023. Of the various ones available, Interac stands out as by far the most popular means of transaction, highlighted by different stakeholders.

For example, at the Canadian Gaming Summit (CGS), Sereena Boparai, Chief Revenue Officer at Clik2pay, asserted to the audience that Interac is popular because it is “faster than the traditional methods of e-transaction”.

“Localised payments methods are increasingly important depending on the jurisdiction you’re operating in,” she said. “Interac is huge in Canada, nine in 10 Canadians have used it.”

Lastly, cryptocurrency usage in Canada remains low. The proportion of Canadians paying with crypto like Bitcion stood at just 3%, the same as in 2022. This is not particularly uncommon when compared to other global markets, particularly in the West and Europe – less than 2% of Americans used crypto for payments in 2023, for example.

As one of the world’s10th largest economies and one with a significantly wealthy population, Canada has a lot of potential for developing payments methods, as well as the more traditional ones.

Although some observers have noted the country’s businesses often have a more cautious nature than in other nations, Canada is moving forward with financial innovation. 

The government has earmarked a CAD2.4bn investment in AI, for example, and stakeholders are becoming more aware of the possibilities of Open Banking.

As further innovation continues, the payment preferences of Canadian consumers may also evolve in line with these developments.