What Do Canadian Consumers Have to Say About Payments? Takeaways from New Research

What Do Canadian Consumers Have to Say About Payments? Takeaways from New Research

What Do Canadian Consumers Have to Say About Payments? Takeaways from New Research

John Dale Hester

John Dale Hester

Hester is senior vice president of Relationship Management for TSYS, overseeing the North American Consumer line of business. His responsibilities include client experience, client retention and business development for the North America segment.

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The potential is enormous for new products and services that provide consumers with additional freedom in how they choose to pay and interact with their financial institutions. But are they ready?

That's just one of the questions this year's Canadian Consumer Payment Study explored as it took a deep dive into awareness, attitudes and behavior around mobile phone capabilities, person-to-person (P2P) payments, and smart speakers, like Amazon's Echo. We learned that, while traditional payment methods aren't going away, interest in new capabilities is definitely growing.

Here are a few takeaways from the report;

When it comes to commerce, how do consumers want to use their mobile phones?

With 90 percent of Canadians subscribing to wireless services, you can't overestimate the importance of mobile in the payments landscape. Currently, Canadians use phones most frequently to view transactions and store loyalty and reward card information. However, they are interested in mobile options that would support securing their cards and allow for use of reward points at the time of purchase.

Canadians want to use mobile devices to: 61% Stop fraudulent transactions immediately; 53% Use loyalty/reward points for discounts at time of purchase; 51% Turn off a card to prevent unauthorized use

Even those who haven't yet or don't frequently use mobile payment methods anticipate they will in the next two years.

91% of the most likely mobile users project that in the next two years, 25% or more of their purchases will be made with a mobile device vs. a physical card.

Are consumers warming up to P2P, contactless and smart speaker payment technology?

While cash and cheques remain the preferred method of payment to individuals, P2P is growing.

Consumers who have used a P2P service rose from 48% to 55%

Awareness and use of merchant apps and mobile wallets has also grown, primarily among younger consumers and for online purchases. Linking rewards to merchant apps will likely attract greater usage across ages and for both online and in-store purchases.

Contactless methods of payments are also on the rise. Consumer adoption of smart speakers as a payment method holds opportunity for growth. It's worth watching as consumers' familiarity and comfort grows.

A bar graph showing the increase in mobile payment and contactless use from 2017 to 2018.

When there's more than one card, what influences the choice?

There's a growing trend among consumers to have multiple credit cards. As in previous years, reward programs were the deciding factor in the choice of one card over another ― even more so than finance charges, which dropped to third place this year. For now, consumers prefer to pick the card themselves, based on where they're shopping or dining and what they're buying, rather than allowing an app to automate the process.

An image of a hand holding three credit cards. The text reads 90% said loyalty was the top influencer in choosing one card over another. Finance charges dropped from 57% to 44% to land in third place.

How do consumers feel about security?

Security is on the minds of consumers, but they don't seem overly concerned about breaches in personal data or financial information. The most common security-related activities over the past year were changing passcodes and reviewing credit reports for irregularities. It is possible concerns are seemingly low because many people believe their banks, the card issuer, or merchant would be responsible if their card information were stolen and used fraudulently.

Security Actions: 53% changed passcodes for online banking and email accounts; 41% reviewed credit reports

Who's responsible for fraudulent activity? 40% the bank; 30% the store or merchant; 25% the card network; 5% other

When it comes to identity authentication methods, consumers are most comfortable with passcodes followed by fingerprints, but there was a significant increase in acceptance around facial recognition, possibly because more mobile devices incorporate this feature.

Mobile Authentication Comfort Levels20172018
Passcode60%64%
Fingerprint50%52%
Facial recognition28%36%
Voice recognition21%24%

Is there any place where technology doesn't rule?

Yes. And this is actually an important point. No matter how important technology is in the banking/payment ecosystem, we can't forget the value of relationships. Most prefer using self-service banking apps or websites for routine activities; however, if there's ever an issue people want to talk directly with a customer service representative.

69% want to talk to a person if there’s an issue with their card.

What's the best way to incorporate new technology?

No matter where technology goes, people belong at the center. Organizations that create a consistent, positive customer experience across all channels will ultimately be rewarded with higher satisfaction and greater levels of loyalty ― in Canada and elsewhere.

To access a full copy of the complimentary TSYS study, click here.

About the TSYS Canadian Consumer Payment Study
The Canadian Consumer Payment Study is an annual research report that explores consumer awareness, attitudes and behavior around mobile phone capabilities, person-to-person (P2P) payments and smart speakers. When the research paper was first published in 2014, the study focused on payment preferences, but has since evolved to address new technologies and other payment innovations impacting all Canadian consumers.

The statements and opinions of the writer do not necessarily reflect those of TSYS.

Other Articles by John Dale

John Dale Hester

John Dale Hester is senior vice president of Relationship Management for TSYS, overseeing the North American Consumer line of business. His responsibilities include client experience, client retention and business development for the North America segment.

Hester is a member of the Board of Directors for TSYS dé Mexico, TSYS' joint venture in Mexico, as well as the Board of Directors for the Columbus Regional Health Foundation. He earned a bachelor’s degree from Oglethorpe University in Atlanta.

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