Within the last several years, new payment technology innovations have changed the way consumers buy goods and services online and at the retail point of sale. In addition to cash, which remains a popular way to pay, consumers have numerous electronic choices in how they wish to pay including mobile phones and digital online wallets.
Innovative technology is creating opportunities, and over time people are choosing to use cheques and cash less. A new report from Payment Pulse (by Payment Canada and Ledger Marketing) found Canadians are increasingly embracing digital payments at the expense of paper-based payments.
The survey uncovered the attitudes of how 1,500 Canadians feel about using using electronic payments. Fully two-thirds of Canadians say they’re willing to give up cheques, and one-half are willing to give up cash for electronic payments through the internet or their mobile device. But change brings uncertainty, and while 61 percent like the idea of change, only 13 percent have uploaded an e-wallet. Of these, 83 percent say the best part of an e-wallet is its ease of use.
The use of cash and cheques is not declining as quickly as expected. This could be because 50 percent of Payment Pulse respondents felt anxious when thinking about using an e-wallet.
However, the Payment Canada report Canadian Payment Methods and Trends reveals there were 20.9 billion transactions in 2015 worth $8.9 trillion. Of those transactions, the greatest number of payments (32 percent) were in cash, a significant decline from 48 percent of all transactions in 2008.
The use of cheques from 2008 to 2015 has also fallen materially, from 6.6% to 4.8%.
Since only 2011, meanwhile, contactless payments rose by 70 percent to 1.2 billion transactions worth around $33.7 billion.
Only 27 percent of people had deposited a cheque using their smartphone camera, with 97 percent happy with the result. Forty-one percent had stored personal information when shopping online with a 9 out of 10 satisfied with security.
The innovation in features that reduce friction in people’s lives serves users well, and in turn can help change longstanding behaviours by making banking easier. No longer do people need to wait until their next trip to the bank or ATM to deposit a cheque to get access to their money. So, while this feature may prolong the life of cheques a little longer, it’s not met with the same frustration of earlier years.
So, while some Canadians are reluctant to adopt electronic banking, those who have are satisfied with the service. In a world driven by instant gratification, consumers tend to use what is fast and convenient.
Canadians who do shop online purchase about 1/5 (19%) of it this way, with younger, more affluent families leading the charge.
In their 2016 report, Payments Canada shared that over 90% of the volume and value of e-commerce purchases by Canadians were made by credit cards, with the remaining made by Interac online debit, e-wallet funds like PayPal, and prepaid cards. Canadians prefer to use credit cards as their primary payment method because their perception of its high level of security.
As other payment methods emerge to challenge the convenience and security of credit cards we can expect to see a different mix of choices which reflect new and different customer needs.
IA360’s diverse background in finance, technology and marketing positions us as a global leader in new payment technologies. These can enhance the security of trusted services like credit cards. Contact us today at info@IA360.com to discuss how we can help improve the services you offer your customers.