Payments Canada Survey: Consumers Are Optimistic About their Financial Wellbeing

Even though there has been considerable economic uncertainty due to the COVID-19 outbreak, recent data from Payments Canada reveals that the nation’s residents feel that the worst might be behind them and are fairly optimistic regarding their financial wellbeing.

Although 56% stated that they spend less overall now since the Coronavirus crisis (consistent with data 6 months back at 58%), almost one in three (29%) think they will be better off financially a year (or 12 months) from now and 36% think that the Canadian economy will be doing better a year from now. Another 56% of Canadians say they should be in a similar financial situation in a year, and 37% think the economy will be about the same a year from today.

Cyrielle Chiron, CSO at Payments Canada, stated:

“While spending levels remain low, the new data infers that Canadians see a light at the end of the tunnel in terms of their financial well-being. Now, around 18 months since a state of emergency was declared in Canada, we continue to see the prevalence of a number of pandemic fuelled payments trends. At the core, Canadians’ concerns around the physical handling of cash and payments terminals has catapulted a shift towards digital and contactless payment preferences. We are also seeing increases in e-commerce use. While the pandemic may have accelerated these trends, the reality is that payments innovation continues to change the way we make transactions.”

The study offers a moment-in-time perspective on Canadian spending behaviors when compared to pre-COVID, and serves as a follow-up to previous study waves in May, September and December of last year.

The updated data points to the continuation of several ket payment trends observed last year, including the following:

Ongoing shift towards greater preference for contactless and digital transactions

  • 42% of Canada residents noted that the COVID-19 crisis changed their payments habits or preferences to digital and contactless for the long-term, which is consistent or in-line with figures from six months back.
  • 57% said they’re using cash less frequently, when compared to 53% six months ago.
  • 35% are using cheques significantly less, the same as 6 months back.
  • 42% are using their debit card and 43% are using their credit cards more against payment terminals, when  compared to 42% and 47% six months back.
  • 32% say they avoid shopping at locations that don’t take contactless, when compared to 37% six months back.
  • 55% say they try to avoid going over the limit to support contactless payments, when compared to 54% 6 months ago.

Concern over physical handling for payments continues to be prevalent among Canada residents

  • 34% said they are uncomfortable handling cash, when compared to 38% six months back.
  • 32% are uncomfortable when they need to touch a debit/credit card payment machine, down from 37% six months ago.
  • 38% have been using online or digital banking more than pre-COVID.
  • 68% said they are using ATMs less often than they used to, which is on par with six months prior at 67%.

Although spending may be down overall, Canadians consumers still prefer cards and digital transfers

  • 35% say they are using credit cards more, when compared to 33% six months ago.
  • 19% said that they are using debit cards more, when compared to 20% six months back.
  • 28% said they are using digital transfers more, compared to 25% six months ago.

Canada residents keep using digital commerce platforms for more diverse purchases

  • 50% say they are using digital commerce platforms to get various products more often than they used to, when compared to 49% six months back.
  • Canada residents report using digital commerce for more diverse purchases compared to pre-COVID; the most common or prevalent increases in purchase categories include: clothes (52%); household items; (43%); food and groceries (38%); health and beauty supplies (36%); electric appliances (27%), and pet food (18%).

Considerable increase in spend on food and delivery services continues

  • 60% of Canada residents report spending more on food than they did pre-COVID, compared to 58% six months ago.
  • 33% report using food delivery services more often, like Uber Eats and Instacart, when compared to 28% 6 month back.

Generally, 46% of Canada residents are tipping more than they used to, wjhen compared to 40% six months prior.

  • Significant increase in preference for new payment channels, such as wearables, home assistant smart devices, and social media channels

Assuming they had the option or ability to make payments from a wearable device like a watch, fitness tracker or ring, 65% of Canadian consumers stated that they would be using them either the same or more since the onset of the COVID-19 outbreak.

  • 59% said they would be the same or more likely to use a home assistant smart device, like Alexa/ Google home or a TV, fridge, or car to carry out a payment.
  • 60% are the same or more comfortable sending funds to a friend or family member using social media channels, like WhatsApp, Messenger and TikTok.

Concern for fraud and cybercrime affecting payments behavior and preferences – however Canadian residents have a fairly high level of confidence that they’re protected

  • 50% of Canadian consumers stated that fraud and cybercrime issues affect their payments preferences and behavior.
  • Although they’re conscious regarding fraud and cybercrime risks, 66% of Canadian residents feel protected by their bank, credit union, and/or credit card provider when it comes to conducting payments.
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