Canada Reportedly Reaches $11.9 Trillion in Retail Payments Transactions

Canada has reportedly reached $11.9 trillion in total retail payment transactions with 21.7 billion transactions in 2023, which is up six per cent year-over-year. This, according to an update shared by Payments Canada.

The report from Payments Canada noted that virtual or online payments represented 86 per cent of total payment volume and 75 per cent of total payment value.

The report shared by Payments Canada added that cash use increased by 15 per cent year-over-year by volume of transactions.

Notably, contactless payments accounted for 53 per cent of payments.

And digital commerce transactions reportedly totaled a substantial $71.6 billion, representing 5.7 per cent of retail sales, up a considerable 5.5 per cent year-over-year. Meanwhile, Payments Canada also noted that prepaid cards showed the greatest growth in terms of overall transaction value among cards.

And online transfers notably surpassed cheques by volume for business payments for the first time. The update from Payments Canada further revealde that more than one in 10 Canadians (13 per cent) have now “used smart home devices (for example, Alexa/Amazon, Google Home) or social media to make purchases.”

And one in five Canadians (20 per cent) sent money abroad; which is reportedly “up 33 per cent YoY.”

Around half (49 per cent) of Canadian businesses plan to use generative artificial intelligence in order to enhance their operations.

Payments Canada also pointed out in its annual Canadian Payment Methods and Trends Report, that fueling the future of payments via choice, which analyzes the 21.7 billion retail payment transactions made in 2023, totaling $11.9 trillion.

The report reveals that the Canadian payment market “grew by six per cent in volume and one per cent in value from 2022 to 2023, and explores payment behaviors and the future innovations that will evolve the way Canadians pay and get paid.”

When it comes to payment methods, credit cards “represented 33 per cent of payment volume in 2023, followed by debit cards (30 per cent); electronic funds transfer (15 per cent); cash (11 per cent); online transfer (six per cent); cheque, automated banking machine (ABM) and prepaid cards (all at two per cent).”

Susan Hawkins, President and CEO of Payments Canada said that evolving technologies, regulations as well as the continued modernization of payment systems mean that Canadian consumers and businesses should actually have more payment options.

Susan added that no matter what Canadians’ payment preferences are, through the continued safe operation of their systems and the “development and enhancement of rules, standards and by-laws, Payments Canada works to ensure payments are easier, smarter and safer for everyone.”

Key YoY payment method trends (2022-2023):

  • Credit and debit card usage leads payment volume. Credit and debit cards remained the leading two payment methods of choice. Combined, credit cards (33 per cent) and debit cards (30 per cent), made up 63 per cent of total payment volume. Electronic funds transfer (EFT) represents 15 per cent of payment volume, followed by cash at 11 per cent, online transfer at six per cent, in addition to prepaid, ABM and cheque each at two per cent.
  • Prepaid cards showed the greatest transaction value growth among cards at 10 per cent. Canadians report using prepaid cards to make payments quickly, to receive discounts/loyalty rewards and to use their own funds. The average prepaid transaction value was $69.
  • Online transfers (such as Interac e-Transfer and PayPal) volume and value grew by 14 per cent and 20 per cent respectively as the fastest-growing payment type. For the first time ever, online transfer usage surpassed cheques based on volume for business payments.
  • Cash transaction volume increased by 15 per cent while transaction value increased by four per cent. The average cash transaction value was $26, slightly lower than 2022 at $29. Almost half of all Canadians (49 per cent) frequently used cash in 2023.

Key five-year payment method trends (2019-2023):

  • Online transfers experienced significant growth. While online transfers make up a relatively small proportion of total payments, they had the highest volume and value growth of any payment method over the past five years (136 per cent and 160 per cent respectively).

Growth and trends among other payment methods over the past five years:

Within the cards space, credit (nine per cent) and prepaid (seven per cent) lead volume growth, with 42 per cent and 24 per cent growth in value respectively.

EFT value has continued to grow, up a significant “eight per cent in volume and 40 per cent in value.”

As stated in the report, cheques have “declined by -35 per cent in volume and -20 per cent in value of transactions.”

Cash was reportedly down -20 per cent in volume and as much as four per cent in value of transactions.

Canadian digital commerce grew to $71.6 billion.

In 2023, e-commerce payments totaled 546 million transactions, up three per cent in both volume and value from 2022.

The top categories of online purchases included “clothing, restaurants/fast food, groceries, electronics and personal beauty products.”

Travel and entertainment events continued to experience strong year-over-year growth, following the “resumption of pre-pandemic economic activity in 2022.”

About the study

Payments Canada worked with payment service providers, payment consultants and researchers to compile a 2023 data set and provide insights into “how Canadian consumers and businesses pay.”

The general methodology involves “combining industry data and market research.”

Industry data is derived primarily “from the Automated Clearing Settlement System (ACSS) data, industry payment card usage data and quantitative and qualitative market research sources.”

Data is also collected from payment service providers and payment networks on an aggregated annual basis, “based on actual payment instrument usage data.”

Survey research is used to fill data gaps and offer key insights.

Lynx transactions are excluded in order to avoid “double counting” as the payment volume and value information in this report are “derived from the clearing data.”



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