As we step into 2024, the Canadian payment landscape is undergoing a dynamic transformation, driven by technological advancements and shifting consumer behaviors. This blog explores the key payment trends that will shape the industry throughout the year, offering businesses and consumers valuable insights into the exciting developments ahead.
Contactless Payments Gain Momentum:
Contactless payments, characterized by the simplicity of “tap-to-pay” methods, are set to witness a surge in 2024. With 84% of Canadian merchants already accepting contactless debit or credit card payments, the nation’s commitment to technological progress is evident. Businesses are upgrading their point-of-sale (POS) systems to seamlessly integrate these touchless transactions into everyday routines, extending beyond retail scenarios to include public transportation, fuel stations, and mobile point-of-sale systems.
Digital Wallets Take Center Stage:
Digital wallets, including Apple Pay, Google Pay, and Samsung Pay, continue their ascent in Canada. Apple Pay dominates with a 60% market share, followed by PayPal at 31% and Google Pay at 30%. The Canadian digital wallet and mobile payments market is projected to experience a compound annual growth rate (CAGR) of 13.28% from 2022 to 2027. The convenience and enhanced security of digital wallets, coupled with the increase in online shopping, contribute to their growing popularity.
eTransfer’s Ascendance:
Interac e-Transfer has become a cornerstone of seamless fund exchanges through email in Canada. Boasting a 92% familiarity rate among Canadians and constituting 33% of non-cash transactions, eTransfer is a preferred method for consumer-to-consumer and business-to-business transactions. With an average transaction size of $400, eTransfer is expected to encompass 50% of all non-cash payments in Canada by 2025.
Cryptocurrency Integration:
While cryptocurrencies like Bitcoin and Ethereum are gaining recognition, their integration into the Canadian payment landscape is a gradual process. Regulatory frameworks are expected to evolve, instilling confidence in consumers and businesses. The growth of major cryptocurrencies, marked by a significant surge in prices, indicates a growing interest and investment in this space. The impending approval of Bitcoin ETFs could further bolster cryptocurrency acceptance as a legitimate method of payment.
Open Banking Initiatives:
Canada’s open banking initiatives, aimed at empowering consumers with greater control over their financial data, are expected to take strides forward in 2024. However, the financial sector faces challenges from a slowing global economy, prompting the need for banks to adapt to disruptive forces like artificial intelligence and digital currencies.
“Buy Now, Pay Later” Services Thrive:
The “Buy Now, Pay Later” (BNPL) phenomenon gains traction in Canada, offering flexibility to consumers for settling payments in installments. Projected to constitute a growing percentage of eCommerce payment methods, BNPL services are poised for continued growth in 2024, driven by the expansion of eCommerce and the convenience they offer.
Final Thoughts on 2024 Payment Trends:
In navigating the evolving Canadian payment landscape of 2024, businesses are advised to prioritize digital payments, embrace security and innovation, and stay informed about emerging trends and regulations. A multi-channel payment strategy, incorporating digital payment providers, will ensure convenience for customers, while vigilance on data security and fraud prevention remains paramount. Staying adaptable and responsive to market demands will be key in thriving within this dynamic ecosystem.
As the year unfolds, these payment trends will shape the future of financial transactions in Canada, providing opportunities for growth and innovation for businesses and enhanced convenience for consumers.