An October 2012 eMarketer report touched on limited payment options in Canada as a historical obstacle to the development of the ecommerce market in the country. But the Canadian Payments Association finds that payment trends in the country are moving in the right direction, as customers leave cash in the bank and use more plastic and epayments to transact.
In October, the CPA released estimates that e-wallet and electronic person-to-person transfers represented CAD$10 billion (US$10.1 billion) in revenue in 2011, with use rising by 40% annually since 2008. Prepaid cards grew in volume by a slightly smaller 32% but the dollar value of those transactions was even more significant, growing by 47% annually over the same period. Although e-wallets, P2P transfers and prepaid cards still account for only about 2% of transactions (and even less in sales volume), their rapid uptake suggests that consumers may be loosening their resistance to electronic and other non-traditional forms of payment.
Continued uptake of debit cards is a particularly promising trend for merchants in Canada, as debit cards carry significantly lower fees than credit cards. The share of transactions made on debit rose 2 percentage points to 16%, while credit cards rose to 14% of the total. Unsurprisingly though, given credit cards’ use for purchasing items that cannot be paid for in full up front, credit cards accounted for a greater share of the total value of purchases (4%) compared to debit cards (2%).
Cash and checks were the only payment methods to lose volume share, though the two traditional forms of payment still made up the majority of transactions in 2011.
The payment landscape in Canada still faces hurdles, including lack of a seamless payment structure for online purchasing. But as consumers in Canada become more comfortable using payment methods other than cash or checks, retailers may be more willing to invest in building out ecommerce platforms, especially payment software, creating a positive feedback loop that will nurture the ecommerce and mcommerce market.
Corporate subscribers have access to all eMarketer analyst reports, articles, data and more. Join the over 750 companies already benefiting from eMarketer’s approach. Learn more.
Check out today’s other articles, “Mobile, Social Get Holiday Boost ” and “B2B Perspective: Docs' Smartphones Enhance Patient Care.”
Thursday, September 18, 1 pm ET
Click to Register. Space is limited.
Join eMarketer for a free webinar:
made possible by Bronto
You've never experienced research like this.
Nearly all Fortune 500 companies rely on us.
Inquire about corporate subscriptions today.