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Pay channel Report: CARDS

Canadians move toward alternative payments By Jennifer Tramontana

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recent payments study conducted by the Canadian Prepaid Providers Organization revealed that while 99 per cent of Canadians have a bank account there is a growing interest, especially amongst younger Canadians, to adopt alternative payment tools that they view as more convenient. Prepaid cards continue to grow in both usage and popularity. At the same time, 13 per cent of consumers are using bank accounts less. Canada has both a highly banked population and many consumers with a strong willingness to try new financial services products. Canadians are adopting emerging payment tools that are more convenient and secure and prepaid cards top the list as the fastest-growing payment product. Prepaid cards also boasted the highest level of satisfaction among payments tools. Prepaid cards issued by American Express, Mastercard and Visa reached $3.1 billion dollars in loads onto open-loop prepaid cards of all types in Canada in 2015. Additionally, eight per cent more consumers are seeking out these types of prepaid cards today compared to 2015. Consumers have said that their current financial tools don’t always meet their needs for convenience or a digital-first experience. Canadians still use bank accounts and credit cards at high levels, but the majority of Canadians have also used alternative payment tools citing convenience as the main reason. Thirty-three per cent of Canadians do not want to use traditional banks because alternative providers and new tools are cheaper and more convenient. Twenty-six per cent want to move to more digital payment tools such as Apple Pay. Additionally, traditional payment tools don’t do a good job at curbing spending or debt. Canadians now hold record amounts of debt, owing $1.67 for every dollar of disposable income and nearly half of Canadians have struggled to stick to a budget in the last year. Twenty-six per cent often keep a running balance on their credit card and 25 per cent have struggled with their credit score. Forty per cent have usually had credit card debt. Ninety-two per cent of Canadians have credit cards, but 31 per cent do not want to have one. Prepaid cards provide an easy way to track spending in real time and completely avoid debt and interest charges. 24

PAYMENTSBUSINESS

2016 CPPO RESEARCH

How Canadians Pay Today The 2016 annual How Canadians Pay Today Survey of 1006 Canadian reveals younger consumers are using alternative payment tools more and bank accounts less.

13% are using their bank account less

AID

PREP

59% have used alternative payment tools citing convenience as the main reason

Eight per c consumers out Americ Mastercard prepaid car 2015

Prepaid cards have the highest lev and satisfaction amongst all paym

95%

Satisfaction rate with reloadable prepaid cards

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89%

Satisfaction rate with single-use prepaid cards

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March/April 2017

A prepaid card user is l university

Payments Business Magazine Mar/April 2017  
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