In recent years, Canada, along with other developed countries, has transitioned from traditional banking practices to innovative modern digital options. Canada is known for its diverse and technologically advanced society, providing both tourists and locals with access to one of the world’s most advanced online payment ecosystems.
More than 90% of Canadian Citizens opt for digital payment systems or gateways, due to their enhanced security, convenience and efficiency as the main reasons. The convenience, speed, reliability and ease of use of digital payment systems have driven the preference for these methods over traditional banking systems.
Credit and debit cards are the most popular online payment method in Canada, accounting for 64% of e-commerce transactions. Major credit card networks such as Mastercard, Visa and American Express are widely accepted across various merchants, making credit cards a convenient option for everyday purchases. While credit cards are favoured for online shopping, debit cards are the go-to choice for in-person transactions.
Regarding digital transactions, users have a wide range of options, whether they’re shopping, subscribing or gaming online.
According to Techopedia’s Sergio Zammit, 5-dollar deposit casinos are a popular way to test the waters without the risk of losing a significant amount of funds while gambling. These casinos accept a variety of payment methods, including credit cards, e-wallets like PayPal, digital wallets and even some cryptocurrencies, providing Canadians with increased accessibility to wager on a variety of games. With a minimum of $0.50 for each slot or table game, Canadians can now utilizeonline casinos without risking any substantial upfront cash infusions.
Despite major credit card companies facing the increased usage of digital currencies, networks such as Visa and Mastercard will likely retain their dominance for the foreseeable future. The long-standing reputation of credit card companies for reliability, customer service, universal acceptance and security guarantees has made online transactions in the country an effortless process for more than two decades.
The popularity of credit cards for online payments is expected to continue for many years. However, they may experience reduced usage due to the increasing popularity of payment gateways such as PayPal, Apple Pay and Google Pay.
However, a uniquely Canadian online peer-to-peer payment platform known as Interac e-Transfer has experienced exponential growth and adoption rates in the country. Some view Interac as a safer, faster and more convenient payment option, making it a potentially popular payment method in the highly competitive online purchasing market.
Initially, the Interac e-Transfer platform gained momentum as a practical way to pay rent, split bills or cover other critical personal expenses. Yet, the company’s recent advancements, transaction speed and technological developments, coupled with increasingly widespread adoption rates have resulted in the company becoming an influential player within Canada’s broader online payment market. Industry experts, like Deloitte McKinsey, are predicting its dominance in the market in the near future.
While Interac e-Transfer functions and operates within the Canadian interbank network, PayPal retains its place as one of the most popular or widely used. PayPal’s popularity in the Canadian online payment sector is due to its versatility, mainstream acceptance and support of alternative payment methods such as debit cards, credit cards, PayPal balances and cryptocurrencies.
Additionally, many users appreciate PayPal’s ease of use, practicality, robust data protection measures and widespread acceptance. While PayPal has had many challenges to its market dominance over the years, the platform allows Canadians to use their virtual accounts on most e-commerce platforms and online retailers.
The adoption and utilization rates of various digital wallets in Canada have seen a significant increase in usageover the past five years. Currently, the Canadian digital wallet sector is maintained by international giants like Apple Pay, Samsung Pay and Google Pay. These platforms allow users to securely store their credit card and bank account information on their mobile devices, enabling them to make contactless payments with a simple tap or scan anywhere they go. The use of digital wallets significantly increased in the latter half of 2023, going from 38% to 51%, as well as 33% in frequency. More than 29% of Canadians completed a purchase using a digital or mobile wallet in 2020, with the number of users growing significantly since then.
Cardless payments, such as mobile wallets and contactless payments are also becoming popular across the country. Mobile wallets surged in the latter half of 2023, increasing from 38% to 51%. Popular mobile wallets in Canada include Samsung Pay, Apple Pay and Google Pay. Between the years 2022 and 2023, the transaction value for Point of Sale (POS) payments is expected to reach $43 billion by the end of 2024, increasing to over 78 billion by 2028.
The notable rise of cryptocurrencies around the world has directly impacted the entire financial industry, particularly in the online payments market. Canada, being one of the global leaders in crypto innovation, is no exception. While the country is recognized for its advanced cryptocurrency infrastructure, the adoption of crypto as a payment method is minimal. Less than 3% of Canadians have used Bitcoin and other cryptocurrencies for everyday transactions for the past two years.
Despite the slow adoption, various cryptocurrencies continue making inroads as a viable payment method in Canada, with major currencies such as Bitcoin and Ethereum becoming increasingly accepted by local online retailers, especially in the tech and gaming sectors.
The decentralized nature of cryptocurrencies appeals to those who value privacy and security in their online transactions. As digital currencies gain popularity, crypto gambling is becoming an increasingly common option among Canadian players and gambling enthusiasts. Many argue it provides players a more secure, innovative and anonymous online gaming experience.
As the competitive landscape of Canadian online payments continues evolving, major industry players such as Interac e-Transfer, PayPal, trusted digital wallets and various decentralized digital currencies are predicted to significantly increase their market share, profitability, influence and user innovation or risk being left behind in the trillion-dollar sector.
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