In the dynamic realm of financial transactions, Canada witnessed a significant surge in payment activities during 2022, reaching an impressive C$11.7 trillion. ¹ Unveiling key trends and methodologies, the annual Canadian Payment Methods and Trends report, published by Payments Canada, sheds light on the evolving landscape. In this article, we will delve into the transformative journey of payment transactions in Canada, exploring vital elements such as credit card processing, merchant accounts, and the pervasive influence of digital solutions.
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Credit Card Dominance and Evolving Trends
Credit and debit cards retained their supremacy, collectively constituting 64% of the total payment volumes in 2022. ¹ A substantial 30% surge in credit card usage over the last five years contrasts sharply with a 41% decline in cash transactions. ¹ Electronic funds transfer and online transfers carved a substantial niche, representing 15% and 5% of payment volumes, respectively. Credit card transactions witnessed a 5% increase in volume, emphasizing the evolving preferences of Canadians.¹
Transaction Values and Methodological Shifts
In terms of total payment value, electronic funds transfer claimed the lion’s share at 59%, followed by cheques at 28%. ¹ Interestingly, while cash transactions constituted 10% of payment volumes, their contribution to total value remained minimal at 0.5%. Online transfer emerged as the fastest-growing payment type, experiencing an impressive 19% growth in value. The average credit card transaction value was C$99, while the average debit card transaction value was C$47. ² Cash use grew 2% in volume, with the average cash transaction value at C$29. ²
Canadian Payment Landscape: Key Takeaways
Despite a 2% decline in total payment volume over the past five years, the total payment value soared by 21%. ³ Cash transactions rebounded to pre-pandemic levels, accounting for 10% of all transactions in 2022. Notably, 89% of Canadians engaged with payment cards monthly for in-store purchases, reflecting a robust reliance on digital payment options. Online transfers surpassed personal electronic funds transfers (EFT), with 1.06 billion e-transfers sent in 2022, marking an 11% increase from the previous year.
Beyond Traditional Methods: Cryptocurrency and BNPL
While cryptocurrency awareness soared to 49%, only 14% of Canadians utilized it, primarily for investment purposes rather than day-to-day transactions. The Buy Now, Pay Later (BNPL) trend experienced a substantial uptick, with 48% of users increasing their usage in 2022.³ These trends signal a nuanced shift toward innovative financial solutions.
Canada’s Vision and Future Trajectory
Tracey Black, President and CEO of Payments Canada, emphasized the profound shift towards digital payments in the past five years. Collaboratively working with the payment ecosystem, NextGen Payment Solutions aims to provide Canadians and businesses with secure, efficient, and convenient payment options—the dynamic landscape hints at continuous evolution, driven by advancing technologies.
“We have seen a dramatic shift towards digital payment options over the past five years. Evolving technologies will continue to influence how Canadians make and receive payments,” said Tracey Black, President and CEO of Payments Canada.
Canada’s payment landscape is undergoing a transformative journey, marked by a surge in digital transactions and a decline in traditional methods. NextGen Payment Solutions Canada (NPS Canada) stands at the forefront, aligning seamlessly with this evolving paradigm. As we navigate the ever-changing terrain of financial transactions, embracing innovative solutions becomes paramount for a future-ready financial ecosystem.
FOOTNOTES:
- “Canada reaches $11.7 trillion in payment transactions in 2022 – up seven percent in value from 2021″, Payments Canada, October 5, 2023. Payments Canada
- “Payment transactions in Canada in 2022 rise by 7% y-o-y to C$11.7trn”,
- Canada reaches $11.7 trillion in payment transactions in 2022 – up 7% in value from 2021″, Cision, Oct 5, 2023. Cision