Alternative Payments On The Rise In Canada, According To New Research

Canadians’ use of alternative payments has seen a double-digit increase in the last two years, according to a new study from the Canadian Prepaid Providers Organization (CPPO) and research firm Leger.

The report, “How Canadians Pay Today,” surveyed more than 1,500 Canadians about their views on payments. Usage of digital, mobile, and prepaid payments have increased by 14 percent as Canadians increasingly turn their attention towards payments that offer convenience, cost-savings, and budget control. Consumers–especially young Canadians–are moving away from cheques and cash, opting instead for alternative payment solutions that offer a “faster, frictionless experience.” 

“As Canadians increasingly opt for non-traditional banking solutions, they are raising the bar for a faster, frictionless experience and added convenience in the entire payments industry,” CPPO chairman Peter Read said. “Prepaid has emerged as a popular foundation for innovations in bank account replacement, money transfer, in-app payments and more.”

The number of people who make financial transactions using alternative payment tools has risen to 73 percent, up from 59 percent in 2016. Non-credit-based electronic payments include Google Pay, Apple Pay, prepaid cards, and other mobile payments. Among these payment methods, prepaid cards show the fastest growth, increasing 7 percent. While the majority of Canadians continue to have and use a bank account, 29 percent of respondents expressed a desire to “sidestep” traditional banking methods. 65 percent of respondents said they made fewer cash purchases in 2018 than the year before, compared to 58 percent in 2016.

25 percent of Canadians find it hard to stay within a budget and are turning to tools and apps to help to manage their finances. 34 percent want to use reloadable prepaid cards that offer no interest charges or overdraft fees, and nearly 50 percent of Canadians with children use the age of 18 would give their children a prepaid card to monitor spending.