OTTAWA, ON–The COVID-19 pandemic continues to cast its long, dark shadow over Canadians, and that has impacted their spending and payments habits, though there is the hope of vaccines on the horizon.
Payments Canada has released new data on Canadian payment trends since the onset of COVID-19, showing that Canadians continue to spend less overall, and are maintaining a digital-first mindset with continued preference for contactless payment methods. The study provides a moment-in-time perspective on Canadian spending behaviours compared to pre-COVID-19, and acts as a follow-up to its May 2020 study conducted during week five of the pandemic.
The new data indicates that a number of payment trends observed in May 2020 resulting from the pandemic continue. These include the increased use of electronic payments and eCommerce, a preference for contactless and online/mobile banking and a decline in the use of cash and cheques.
Canadians have reported mixed sentiment around the permanency of these payment preferences. Although approximately 34 percent say report they do not expect to return to using cash to the same extent as pre-COVID-19 once the pandemic recedes, 31 percent expect to use it more often as the economy recovers. Even though they have favoured using either digital or contactless payments since the onset of the pandemic. But while cash may be reintroduced into Canadian wallets, 44 percent of those surveyed report that COVID-19 has changed their payments preferences to digital and contactless for the long-term.
“In this most recent research, about 60 percent of Canadians report that they continue to spend less than before the pandemic,” said Tracey Black, president and CEO, Payments Canada. “Businesses across Canada are focused on how to best meet consumer needs as the pandemic continues. For many retailers, this includes building and leveraging an online presence and offering convenient and secure payment options for customers at point-of-sale.”
Key study findings include:
–Around 61 percent of Canadians report spending less than pre-COVID-19, compared to 75 percent in week five of the pandemic.
–32 percent of Canadians report using credit cards more, 21 percent report using debit cards more and 25 percent report using e-Transfer more. To note, these payment methods include those using tap and/or through eCommerce.
–48 percent of Canadians are using eCommerce platforms more often than pre-pandemic. Commonly purchased items include clothes (47 percent), household items (46 percent), food and groceries (46 percent) and health and beauty products (35 percent).
— When it comes to food delivery services, 29 percent of Canadians report using services such as Uber Eats and Instacart more often than pre-COVID-19 (up 3 percent).41 percent of Canadians reported tipping more (up 12 percent).
–Approximately 47 percent of Canadians surveyed report tapping their debit and credit cards more often than pre-COVID-19, compared to 53 percent at week five of the pandemic. 40 percent report they are uncomfortable when they have to touch debit or credit card payment machines.
–36 percent of Canadians report avoiding shopping at places that do not accept contactless payments, down from 42 per cent in week five. And 50 percent said they tried not to exceed the contactless limit when buying something in-store, compared to 52 percent in week five.
Moreover, concerns of surface contact with cash and coins have continued to shift merchants and consumers away from cash payments, said the report. 42 percent of Canadians say they are uncomfortable handling cash in general. Compared to pre-COVID-19 use, 57 percent of Canadians report using cash less (compared to 65 percent in week five). The cash use trend is reflected in ATM use. 64 percent of Canadians using ATMs less, an increase since week five of the pandemic (from 61 percent). Canadians are also a little more reluctant to use cheques and prepaid cards. 32 percent report using cheques less (down slightly from 35 percent), and 32 percent report using prepaid cards less (down from 37 percent).
“There’s no doubt that the COVID-19 pandemic continues to accelerate the adoption of digital and contactless payments with a widespread shift away from paper-based payments,” said Cyrielle Chiron, head of research and strategic foresight, Payments Canada. “This is a trend we have seen over a number of years, including through Payments Canada’s recently released Canadian Payments: Methods and Trends 2020 report that showed a surge in electronic payments, which represented around 77 percent of all transactions in 2019. The reality is that Canadian consumers and businesses want more efficient, faster and more secure payment options, so we can expect this trend to continue long-term with a focus on payments innovation.”