The way we pay is changing dramatically, with new technology and demographics driving much of this change.
From the use of automatic and invisible payments to the popularity of apps for tracking spending, a new study released today by Payments Canada reveals that Millennials and Gen Z yearn for easier, more convenient options to meet their changing purchase and lifestyle patterns.
These payment preferences should strike a chord with Canadian businesses. The 18-34 age group is more likely to choose an online retailer based on how easy it is to checkout (73 per cent compared to 58 per cent average). Nearly half say they are more likely to make a spontaneous purchase because their payment data is stored within an app or online. And they prefer to use ride hailing apps rather than a taxi because the payment process is simpler (50 per cent compared to 29 per cent average).
“The findings validate the relevancy of the payments experience for today’s consumer and the need for a modern payments system that will make payments easy, fast and data rich,” said Gerry Gaetz, President and CEO of Payments Canada. “This is why the time is now for our payments Modernization initiative. We need a system that can set the platform for innovation, while maintaining the high security and resiliency standards Canada is known for.”
When it comes to cash, it seems the legacy payment option may soon be behind us – a quarter (25 per cent) of Canadians 18-34 say they have stopped using cash for low price purchases (compared to 17 per cent of all Canadians). And 70 per cent say they are willing to move away from cash in favour of other forms of payment (compared to 62 per cent of all Canadians). Most notably, 42 per cent of Canadians use cash less than four times per month, compared to 20 per cent in 2018. For Canadians aged 18-34 this decrease in cash use is even more significant: 53 per cent use cash less than four times per month compared to 20 per cent in 2018.
Other key insights about this age group include:
- More than a quarter (29%) are in favour of open banking (compared to 17% average).
- Three-in-five (61%) have used their phone to deposit a cheque (compared to 38% average).
- Nearly two-thirds (64%) say they use their credit card because there are no better options for in-app purchases (compared to the average of 53%).
- Debit and credit are the methods of payment that rank highest in trust for this age group.
- Canadians aged 18-34 are far more likely to see a payment on their bank statement that they don’t recognize(20% versus 12% average) and more say this makes them feel anxious (84% versus 81% average).
- A majority (77%) are interested in a web dashboard that combines all of their financial data to better track spending (compared to 63% average).
- More than a third (34%) say they want to be paid daily (compared to 21% average), and another third (36%) say that this would help them better manage or track their spending (compared to 24% average).
The study was conducted by Leger Marketing Inc., on behalf of Payments Canada between April 12 and April 19, 2019. An online survey of 1,564 Canadians was completed using Leger’s online panel. The margin of error for this study was +/-2.8%, 19 times out of 20.
You can review detailed results from the Payments Pulse Survey: Consumer Edition.
About Payments Canada
Payments Canada ensures that financial transactions in Canada are carried out safely and securely each day. The organization underpins the Canadian financial system and economy by owning and operating Canada’s payment clearing and settlement infrastructure, including associated systems, bylaws, rules and standards. The value of payments cleared and settled by Payments Canada in 2018 was more than $53 trillion or $209 billion each business day. These encompass a wide range of payments made by Canadians and businesses involving inter-bank transactions, including those made with debit cards, pre-authorized debits, direct deposits, bill payments, wire payments and cheques. Payments Canada is a proud supporter of the Catalyst Accord and the 30% Club.
For more information or to schedule an interview, please contact: Tricia Weagant, 613-806-5168, email@example.com.