This post is based on the comprehensive findings published by Payments Canada in its annual 2019 Canadian Payment Methods and Trends report.
Canada exchanges almost $210 billion worth of payments and financial transactions on average every business day. More of these transactions take place electronically each year as Canadian payment systems and business processes go digital. According to Payments Canada’s 2019 Canadian Payment Methods and Trends report for 2018, the payment market grew to 21.1 billion transactions worth more than $9.9 trillion.
Here is a look at the most significant findings and statistics for both Point-of-Sale (POS) and remote transactions in Canada in 2018.
Canada’s cashless payments: Point-of-Sale (POS) stats
Point-of-sale (POS) transactions take place either physically or virtually via online and e-commerce vendors and payees, brick-and-mortar merchants, or mobile and in-apps. This space is undergoing massive growth, evolving largely because of electronic payments and to support mobile e-commerce.
Fast facts on Canada’s POS transaction growth in 2018
The big picture of POS in Canada
- The total volume of POS transactions in 2018 was 15.7 billion.
- The total value of POS transactions in 2018 was over $856 billion.
- The average POS transaction value was $54 in 2018.
- In the last five years, POS volume has increased by 5% and value by almost 25%.
Types of POS payments: Debit is king in Canada
- Debit cards are now the most widely used payment method at 6 billion transactions, overtaking cash transaction volume for the first time in 2017.
- Contactless debit made up 60% of the total volume of contactless transactions and 35% of the value. The average debit transaction was $42.
- Credit cards are the second-most-used POS payment method in volume and had more transactional value than all other POS methods combined in 2018.
- Despite 4.5 billion POS cash transactions—it continues to decline every year, down 40% from 2013.
Mobile wallets and contactless transactions
- Mobile device and contactless card payments totalled 4.1 billion transactions (a 30% increase since 2017) and $129.9 billion value in 2018.
- More than one-third of Canadians used a tablet, phone or device to make a purchase in 2018.
- Canadians who use credit contactless payments tend to be younger, have higher earnings and live in British Columbia and Ontario.
E-commerce POS and credit cards
- Approximately 20% of all of Canada’s shopping has migrated to e-commerce.
- Credit card usage is faster growing than debit because of rewards points and the perceived ease-of-use and security for e-commerce.
- Canadian online merchants and businesses lack diverse payment options for e-commerce.
Canadian businesses love remote payments (and EFTs)
Remote transactions and payments are all those that don’t require a POS device or application. This often means that payors rely on a third party such as a bank or financial technology partner to route payments through Electronic Funds Transfers (EFT), cheques, and other payments. A few examples include bill payments, direct deposits, pre-authorized payments, and P2P and B2B transactions.
Fast facts about remote payments in Canada
- There were a total of more than 4.5 billion remote transactions in 2018.
- Remote transactions totalled approximately $9 trillion in value in 2018.
- These transactions make up 91% of the total Canadian transaction value, but only 25% of the total volume.
- The average remote transaction value was $1,993.
Electronic Funds Transfer (EFT) transactions: Number one for businesses
- EFT transactions are the leading payment method for businesses both in value and volume—and overtook cheques for the first time in 2018.
- EFT growth lessened from its growth spurt in 2017 but accounts for 49% of remote payment value.
- Electronic payments totalled 73% of the total payments volume and 59% of value in 2018.
- The average EFT transaction size was $1,718 in 2018.
- EFT and cheques dominate remote payments in Canada totalling $8.8 trillion in combined value, but credit cards and online transfers are growing quickly.
In the end, Canadian businesses are continuing to move all systems, including payments, to digital. While they are not letting go of paper cheques and cash as quickly as consumers are, they are increasingly adopting electronic payments. Business owners and consumers will always seek more efficient, faster, and easier ways to make payments.