COVID Is Accelerating Changes In How Canadians Pay And Are Paid

Small Business Canada
By: Tracey Black, President and CEO of Payments Canada

COVID-19, for all of the challenges it presents, has created the need and opportunity for rapid advances in digital experiences. Companies of all sizes have been required to take a closer look at their digital strategies, the impacts of digitization on their operating models, and to react. Businesses that rely on face-to-face interactions have had significant changes to make as Canadians increasingly require and demonstrate a “digital-first” preference

From a payment perspective, the move to digital payment options has been underway for some time; we have observed steady declines in the use of cash and cheques for years. COVID-19 has accelerated a preference for digital payment options, highlighting the security, speed, and convenience benefits of paperless payments.

At the point-of-sale (POS), fast, safe, convenient contactless payment continues to replace cash. In 2019, digital payments (credit and debit) grew by 10 percent to represent 75 percent of total transactions; cash payments declined by nine percent to represent 22 percent of total transactions. In 2019, Canadians made close to five billion contactless card payments and four billion cash payments at point-of-sale. A survey by Payments Canada in May demonstrated that consumer POS payment preferences have accelerated as a result of COVID-19. In early April, the credit networks increased the contactless tap limits from $100 to $250, dramatically increasing the number of transactions that can be paid for with a tap.

Our survey showed that 42 percent of Canadians avoided shopping at places that didn’t accept contactless payments, and 52 percent tried not to exceed the contactless limit when buying something in-store.

Our survey showed that 42 percent of Canadians avoided shopping at places that didn’t accept contactless payments, and 52 percent tried not to exceed the contactless limit when buying something in-store. Just over 60 percent of Canadians surveyed reported using cashless frequently than pre-COVID-19, and ATM withdrawal volumes decreased by more than 50 percent relative to 2019.

Consumer use of cheques also continues to drop significantly, with a 24 percent decrease in volume between 2018 and 2019. Canadians are turning more frequently to digital payment options, especially for P2P payments. Interac released information in May demonstrating a dramatic increase in first time Interac e-Transfer users, and record e-Transfer transaction volume in April.

Almost 8.8 million Canadians have received Canadian Emergency Response Benefit payments, resulting in 39 million payments as of September 19. As a result of an industry-wide effort to allow Canadians to register online to receive these benefits digitally, about 90 percent of these payments have been made using direct deposit rather than cheque. Direct deposit is a much faster, secure, and more convenient method of payment allowing recipients to receive benefits directly into their bank account.

As a result of COVID-19, Canadians have become reliant upon fast, safe, convenient, remote payment experiences. Canadians have benefited from increased access to digital payments through existing and new channels – from in-app options to smart home assistants (in 2019, 15 percent of Canadians made purchases via gaming consoles and home assistants like Google Home ). Initiatives like the government’s Digital Main Street and Go Digital programs are providing Canadian businesses with improved access to the tools needed to meet Canadians’ digital payment needs and expectations.

Ongoing digital innovation in payments will continue to provide benefits for Canadian businesses and consumers. Payment system stakeholders are aware that the availability of payment options can determine how and where Canadians choose to shop. We understand the importance of a secure and frictionless payment experience that meets consumer expectations for Canadian businesses of all sizes. And we recognize the value of data-driven insights from digital payments that provide businesses with a competitive edge.

Payments Canada has heard clearly from SMEs that efficiency and a wider selection of payment options are important. The launch of Canada’s Real-Time Rail in 2022 will support the introduction of real-time, irrevocable, secure, data-rich payment options that can help to lower operational costs and boost bottom-line returns over time. Canadian SMEs are encouraged to visit to learn more about the Real-Time Rail and ISO 20022, the message standard that will support data-rich payments.

Canadian SMEs are encouraged to visit to learn more about the Real-Time Rail and ISO 20022, the message standard that will support data-rich payments.

Small Business Canada

Tracey Black, President, and CEO, Payments Canada

Tracey Black is the President and CEO of Payments Canada. Building on the organization’s past success, Tracey provides the leadership to define the next stage of Payments Canada’s evolution, supporting the payment needs of Canadian consumers and businesses and empowering a new era of modern payments.

Prior to Tracey’s appointment as President & CEO in March 2020, and since joining the organization in November 2018, Tracey was the Executive Director of Modernization, responsible for leading the modernization of the Canadian core clearing and settlement payment infrastructure.

Tracey has held executive roles at TD Canada Trust and RBC Royal Bank and has consulted extensively in the financial services industry as an independent consultant, and with McKinsey & Company. Previously, Tracey was the President of GFH Group Inc, where her responsibilities included the launch of chip cards (or smart cards) in Canada.

Tracey has more than 20 years of professional experience with extensive industry knowledge and deep expertise in payments strategy and innovation.

Leger/Payments Canada. 2019/2020 Canadian Consumer Payments and Transactions Survey

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