Canada has in recent times become perceived as a very digitally-savvy country. In fact, not only are Canadians savvy, they are also early adopters of modern payment innovations as a poll conducted by Canadian Imperial Bank of Commerce (CIBC) found back in October.
The poll found that the country’s welcoming attitude to FinTech innovation is being driven by the younger generations with 85 per cent of 18-34-year-olds (millennials) saying they are open to trying new banking or payment technology. Older groups such as the baby boomers (55 and older), whilst slower to adopt, are also open to new ways of banking at 51 per cent.
This was evidenced by MasterCard’s figures, which showed Canadians shopped online in record numbers during this year’s holiday shopping season.
So it really shouldn’t come as a surprise that a survey of 1,000 Canadians conducted by marketing company GfK found that on the whole they eschewed cash in favour of more modern alternatives such as debit and credit cards.
Last year, only a quarter of Canadian transactions were made in cash, marking a two per cent drop from the previous year whilst credit cards proved to be the most popular and unchanged from 2014 at 42 per cent.
“We also saw a number of years ago in this country a very concerted effort by the card companies to get people to start using their cards for smaller payments. That clearly has worked,” said Stephen Popeil, vice-president of GfK Canada.
“We’re clearly seeing that the use of cash is getting less and less in this country. Is it ever going to disappear? I don’t think so, because of the nature of certain economies that are out there. But clearly, what we are seeing now is every year fewer and fewer payments are being made with cash,” he added.
Debit cards also trumped cash, making up 28 per cent of all transactions, but only showing a marginal increase from the previous year.
Mobile payments can’t shake security concerns
If you came here expecting to discover that cash suffered at the hands of mobile payments, and mobile payments alone, then look away. The figures so far have been: credit cards at 42 per cent, debit cards at 28 and cash at 25. Mobile payments came as you may have by now roughly worked out at 3 per cent, up by one per cent from 2014.
GfK‘s research suggested the usual fact that mobile tended to be more popular among younger users and the usual reason for why the figures are so low: security concerns.
Over half (53 per cent) of respondents have said that they were worried about their personal information when using a mobile payment app. Just two out of ten people said that they believed the apps to be 100 per cent secure.
“We have to figure out as an industry how we’re going to communicate safety and security. That’s a challenge, in my mind, for the whole fin-tech industry,” said Popeil.
“It’s got to be more than just biometrics, like you find Apple and some of the phones now with thumbprints. There’s got to be some way to convince everyone that these systems are safe and secure,” he added.
Loot, the smartphone banking app aimed at helping millennials stay on top of their finances, has finally launched this week and started to open accounts of the 25,000 people on its waiting list.
Amazon have recently launched their new in-store innovation service, Amazon Go.
Contactless cards made up 22% of all card transactions in the UK in September, according to the latest figures from the UK Card Association. Payment card spending grew by 0.6 per cent in September to reach £54.7 billion.
Google's Android Pay is getting into the festive spirit in the UK by introducing some Christmas rewards on its payment app. It also announces better interaction with Transport for London and Uber.