Prepaid, Mobile and Online Payments Poised for Growth in Canada (July 29, 2013)
July 29, 2013
Cash will be knocked out of its position as the No. 1 form of payment in Canada within the next five years, if present growth trends in mobile, prepaid and online payments continue, a new report suggests. All forms of electronic payment are experiencing substantial growth in Canada as consumers’ use of smartphones and their awareness of contactless payment options rises, according to the Canadian Payments Forecast 2013 from Technology Strategies International (TSI). The Oakville, Ontario-based firm conducted research and analyzed data from among 4,000 Canadian consumers for its annual report.
The prepaid card market is expected to “expand rapidly,” the report said. Excluding payroll cards, the purchase value of open-loop prepaid cards and closed-loop gift cards in Canada reached about $3 billion in 2012, with closed-loop gift cards accounting for more than half, or 62.8 percent of the total, Christie Christelis, TSI president, tells Paybefore. Open-loop prepaid cards are gaining popularity in Canada, especially as gift cards. Among consumers who purchased one or more gift cards in the past year, 42 percent selected an open-loop gift card, Christelis says. Open-loop prepaid gift cards are on track to grow twice as fast as closed-loop gift cards over the next five years, his research suggests.
More than half of Canadian smartphone owners have used their phones to make payments, such as paying bills through mobile banking apps or Websites, and Internet-based payments, according to the report. The incidence of consumers using mobile phones for in-store payments in Canada is “very low,” according to Christelis. But as NFC-enabled phones and contactless payment acceptance grows, he forecasts that by 2017, about 3 million Canadians will use their phones regularly for making all types of payments. Online payments will exceed $40 billion within five years, he predicts.
