According to the recently published Canadian Payments Forecast 2024 by Technology Strategies International Inc., contactless payments in Canada experienced a significant 17% increase in 2023, now accounting for 63% of all in-store transactions. The total value of contactless payments grew by over $80 billion, marking a 20% year-on-year growth.
Christie Christelis, President of Technology Strategies International, attributes this growth to several key factors, including the widespread availability of contactless-enabled debit and credit cards and high merchant adoption of contactless terminals. The contactless payment limit increase to $250 during the COVID-19 pandemic also played a role by allowing consumers to purchase higher-ticket items without PIN entry.
While payment cards represent three-quarters of all contactless transactions, the use of smartphones and wearables is on the rise. With nearly 30 million smartphones in use across Canada—74% of which are NFC-enabled—mobile transactions grew by 42% in 2023, now making up 23% of all contactless payments.
“We’ve seen a substantial rise in wearable payments, and while still in its early stages, wearable payments are expected to outpace mobile payments over the next five years,” added Christelis.
The report also highlights that 90% of consumer payments in Canada are in-store, with payment cards remaining the dominant form factor. Mobile payments, however, are becoming increasingly crucial for online and remote transactions. In 2023, mobile bill payments and transfers made up 73.5% of all such transactions, a figure expected to rise to 82.1% by 2028. Additionally, more than half of adult Canadians now use their smartphones for online shopping.
Other key findings include:
– Credit card payments represented 56% of all consumer payments by value in 2023 and are forecast to rise to 62% by 2028.
– Prepaid card usage has seen strong growth over the past two years.
– Cash in circulation has dipped for the first time in several decades.
– Online purchases are expected to grow at a slower pace following the pandemic-driven surge.
The Canadian Payments Forecast 2024 offers a comprehensive analysis and projections for consumer payments in Canada, including detailed insights on credit and debit card payments, mobile payments, online transactions, and the growing use of wearable technology.
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