Market Trends of Canada Real Time Payments Industry
This section covers the major market trends shaping the Canada Real-Time Payments Market according to our research experts:
Increasing Requirement for Convenient Payment Options
- The primary payment method in Canada today is bank-to-bank transfers using Interac, which does not offer a digital user experience to consumers. The rising popularity of Square's Cash App, PayPal's Venmo app, and others in the United States market.
- Peer-to-peer payment is a natural extension of the digital platform and will complement and seamlessly integrate with consumers' payment behavior. Canadians relied primarily on Interac e-transfers for peer-to-peer payments1. In 2019, more than 486 million of these transactions total $169 billion.
- As more aspects of consumers' lives go digital, these numbers will continue to grow and form a larger part of Canada's almost $10 trillion payments landscape. Canadians prefer to electronically pay government taxes through their online banking account using bill payment, a pre-authorized debit, or a credit card.
- Nowadays, Canadians can sign up for a free account through the payment app and get convenient access to products that can help them achieve their financial goals and have a positive impact on the planet, including a digital spending account with any Debit or Credit Card featuring automatic carbon offsetting, free monthly credit score monitoring, ID fraud protection, bitcoin trading, and personal loans.
- There were 800 million transactions worth $249 billion in 2020. Online transfers continued their growth in 2020, increasing significantly by 48 percent in volume and 40 percent in value and representing four percent of the total payment volume in Canada (compared to two percent in 2019).
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Growing e-commerce environment
- Canada E-commerce payments are made through merchant-provided online storefronts and applications via computers or mobile devices (e.g., tablets, smartphones). In 2020, e-commerce payment transactions totaled 477 million transactions worth $56 billion in Canada, up 13 percent in volume and 20 percent in value from 2019. The COVID-19 pandemic helped fuel sharp growth in e-commerce payments in 2020. Due to lockdown and emergency stay-at-home orders, consumers replaced in-store with online shopping.
- According to Statistics Canada, in May 2020, e-commerce sales were double that of May 2019. Canadians will likely continue to leverage online platforms for everyday needs, even after the COVID-19 pandemic.
- A PayPal Canada survey revealed that Canadians generally spend $178 each month online, an increase of $69 from pre-pandemic, even as Canadians emerge from lockdown. Overall, this increase represents an increase of more than $2 billion in monthly online spending.
- Many businesses transformed by moving to e-commerce sales platforms for the first time. Canadian retail merchants' new online store creation increased 20 percent year-over-year during the last two weeks of March 2020. This contributed to the rise in online purchases, as Canadians had more choices for online shopping.
- The COVID-19 pandemic also changed the online shopping patterns of consumers. The product categories that experienced the greatest year-over-year decline were traveling, memberships (e.g., fitness, social clubs), and entertainment events. In contrast, home entertainment (i.e., movies/music, games), personal beauty products, and gift cards experienced year-over-year growth.
