Traditional payment methods still prevail, but cash and cheque decline accelerates as businesses and consumers adopt new technologies
Ottawa, ON -- (December 18, 2015) – New research released today from the Canadian Payments Association (CPA) shows changing consumer and business behaviours and a payment system in transition. The Canadian Payment Methods and Trends Report points to a growing dependency on electronic payments and new payment channels, which appear poised to move to the forefront of Canadian payments.
"The research provides important insights for the industry and the Canadian Payments Association as we look to modernize the country's clearing and settlement systems," said Gerry Gaetz, President and CEO of the CPA. "While traditional payments clearly continue to fill a vital role, the data shows an accelerating shift to new channels for electronic payments."
The CPA report reveals several interesting trends in the data covering 2011 – 2014:
- The total transaction average annual growth was two per cent in volume terms and five per cent in terms of value (volume refers to the number of transactions and value to the total dollar amount of those transactions).
- While still the most widely used type of payment, cash use was down markedly. Cash payment volume fell by 16 per cent, demonstrating a decline of approximately five per cent each year.
- While the volume of cheques written continues to decline, the value of those cheques is growing slightly. There were 20 per cent fewer cheques written in 2014 than in 2011, but the value of cheques grew by eight per cent during that time.
- The point-of-sale (POS) environment is tilting towards credit card use. This could be attributed to credit cards' head-start on contactless (i.e. tapping at the register with cards or mobile devices) and customer loyalty rewards programs. Credit cards now account for 57 per cent of POS value and 26 per cent of volume.
- Electronic Funds Transfer (EFT), which includes direct deposits and pre-authorized debits, now accounts for 44 per cent of all transaction value – growing 10 per cent per year since 2011 – and is poised to overtake cheques in 2015.
- Online transfers were the fastest growing payment types. While still a small segment of payments, they have grown by 184 per cent in volume and 228 per cent in value since 2011.
The Canadian Payment Methods and Trends Report examines data from the CPA's retail payment system combined with data gathered from service providers, researchers and industry consultants. To assess the evolution of the market over time, the researchers have developed and analyzed a multi-year data set, including 2008, 2011 and 2014.
For access to more payments data and insights, please visit the CPA's website to explore the full paper, Examining Canadian Payment Methods and Trends - Report (2015)
About the Canadian Payments Association:
The Canadian Payments Association (CPA) owns and operates Canada's payments clearing and settlement infrastructure, including associated systems, by-laws, rules and standards. The CPA underpins the Canadian financial system and economy by providing safe, efficient and effective clearing and settlement of payments, which totaled $44.9 trillion in 2014, or $178 billion every business day. These encompass a wide range of payments made by Canadians and businesses involving inter-bank transactions, including those made via debit cards, pre-authorized debits, direct deposits, bill payments, wire payments or cheques. The CPA's Large Value Transfer System (LVTS) is designated by the Bank of Canada as a systemically important payment system.
For more information or to schedule an interview, please contact:
Canadian Payments Association