Cash and other paper-based transactions are still the most popular way of paying Canada, a new Canadian Payment Methods and Trends (CPMT) report has found. But for how long?
According to the report, cash continues to be the most widely used payment method, accounting for most transaction volume.
However, look a bit closer at the data and the numbers paint a less than rosy future for cash. Yes, the volume may still beat that of other payment methods, but there is a large amount of data that point to a dramatic decline of cash.
For example, cheque and paper item payment volumes fell by eight percent, a larger decrease than the historical average (six percent). In fact, since 2011, cash usage has declined by 20% while cheques have seen a 25% drop in the same period. In terms of transaction value, cash makes up a much lower proportion of POS transactions. Cash is actually being used in fewer transactions and for smaller amounts, meaning that cash has on average the lowest transaction size of all payment methods.
Newer payment methods
While cash is still clinging on to its throne, with a questionable future, newer payment methods are “thriving”. The report’s data shows contactless going from strength to strength in all aspects including volume and value. In 2015, contactless payments grew by 70 per cent in both volume and value of transactions.
Online payments has surpassed its four year average volume growth, jumping to 47% growth in 2015 (up from 43%). However, one shouldn’t get carried away just yet as online payments still only count for less than one percent of the total transaction volume and value.
“In the remote environment, online transfers are starting to have a real impact with consumers – the volume of online transfers made by consumers reached an estimated 120 million transactions, an amount just under half of the total volume of consumer cheque use (255 million),” it said in the report.
Carol Ann Northcott, Payments Canada’s chief risk officer and vice-president of risk, security and research said:
“While paper-based payment methods continue to decline, emerging technology is shaping the Canadian payment landscape of the future.”
The crowdfunding was part of a £22m funding round that will support the launch of a current account facility.
BT launches innovative showcase to help financial services create secure digital customer experiences
Get a glimpse into BT’s new banking and insurance showcase at Adastral Park.
Credorax discusses the importance of cross-border payments and how choosing the right acquirer can determine future success.
Richard Broadbent, General Manager, Banking, Wincor Nixdorf UK/I, explains how customer attitudes to loyalty are changing because of technology.