Canada: An analysis of payments and e-commerce trends
This article was originally published on The Paypers on June 6.
By Stephen Yun, Senior Analyst, Market Insights, Payments Canada
Stephen's areas of focus include the Consumer Payment Methods and Trends and Payment Behaviour Tracking studies, and leveraging research insights to create a consumer/business payment narrative and drive business action for his business partners. Stephen has more than 20 years of experience leading marketing and customer experience research. He holds MBA and BBA degrees from the Schulich School of Business (York University) specializing in marketing and finance.
From e-commerce to generative AI (GenAI), technology plays a key role in providing choice in payments.
In Canada, 21.7 billion retail payment transactions were made in 2023, totalling CAD 11.9 trillion. In analyzing these transactions, Payments Canada’s latest Canadian Payment Methods and Trends report sheds light on how payment innovations have evolved purchasing behaviours and preferences in e-commerce. The report also explores emerging trends in international payments and technologies, including GenAI, wearables and social media-based payments.
E-commerce payment trends in Canada
E-commerce payments in Canada accounted for 546 million transactions worth 71.6 billion in 2023, up three per cent in both volume and value year-over-year. Canadians made an average of 4.1 purchases (up from 3.6 the year prior) and spent 213 online in a given month (down from 217 the year prior). The top categories of online purchases included clothing, restaurants/fast food, groceries, electronics and personal beauty products.
Diving further into e-commerce, the report shows that the majority of online purchases were made via e-commerce websites. Sixty-three per cent of consumers who made an online purchase in a given month did so using their computer, laptop, or mobile device to access online merchant web pages. One in four Canadians made an in-app online purchase in a given month, while eight per cent of Canadians made online purchases through a gaming console (e.g., PlayStation 4, Xbox One) in a given month.
Significantly more Canadians perceived buying online from a Canadian merchant to be easier compared to buying online from an international merchant. Ninety per cent of consumers rated their experience purchasing from a Canadian retail business website as easy, while 67 per cent rated purchasing from an international website as easy. Over half of all consumers (56 per cent) were satisfied with the time it took to execute the payment when making it through a website or payment app.
Beyond e-commerce: Emerging payment trends and technology
Around one in two businesses (49 per cent) intended to use GenAI to make their operations and processes more efficient. The top three GenAI applications perceived to benefit businesses most are fraud detection and prevention (44 per cent), automating payment processing (37 per cent) and creating personalized customer experiences (29 per cent). Personalized experiences facilitated by GenAI can include personal retail assistants and 24/7 chatbot support that includes carrying on customer conversations.
Wearables, such as fitness trackers and smartwatches, were used to initiate 44 million payment transactions. Wearable transactions totalled 1.1 billion in 2023. Although this represented less than one per cent of total contactless transaction volume and value in 2023, wearables usage for payment increased by 32 per cent in volume and 34 per cent in value from 2022.
Credit card contactless (includes tap-to-pay by card or mobile device) made up the largest proportion of contactless transaction volume at 57 per cent. In-store mobile contactless payments increased by 42 per cent, representing 23 per cent of total contactless transaction volume.
More than one in 10 Canadians used smart home devices and social media to make purchases. Thirteen per cent of Canadians used smart devices or social media to place an online order or initiate a payment in a given month in 2023. Top smart devices and social media used for purchasing included Amazon Alexa, Google Home, Instagram, Facebook and Apple Siri.
Cross-border payments
The research also shows that international payments are on the rise in Canada. The proportion of Canadians who sent money internationally increased by 33 per cent from 2022 to 2023, as one in five Canadians did so at least once over a twelve-month period. The average value of payments sent to individuals internationally in a given month in 2023 was 1,125, compared to 1,231 sent to businesses internationally. Extra or hidden fees (26 per cent) and the high cost of each transaction (23 per cent) were cited as the biggest pain points for sending money internationally.
Overall, Canadians still prefer using their main bank or credit union for sending money internationally. Almost one third of Canadians (31 per cent) who sent money internationally in the last twelve months used an electronic transfer via their mobile banking app or online banking account, while 11 per cent of Canadians used wire transfers.
Regulatory environment
Evolving regulations and industry policies will enable new ways to securely pay for goods and services, transfer money and better compete nationally and internationally. This includes changes to the Canadian Payments Act (CP Act), which sets Payments Canada’s mandate, public policy objectives and membership eligibility. Amendments to the CP Act received Royal Assent in 2024.
After coming into force, these amendments will foster competition and innovation through expanded membership eligibility and access to Payments Canada’s payment infrastructure, including the forthcoming Real-Time Rail (RTR). Membership will be expanded to include:
- payment service providers (PSPs) as defined in the Retail Payment Activities Act (RPAA) that perform retail payment activities
- credit union locals that are members of a central or cooperative credit association
- clearing houses of designated clearing and settlement systems
Coming together to shape the future of payments
As payment technologies continue to advance, so too will the ways Canadians choose to pay and send or receive money. From AI-powered personalization to wearables and social commerce, the future of payments is already taking shape — and evolving fast.
Canada is entering a new era of inclusivity and competition in the payment space. With a growing appetite for frictionless, secure, and personalized transactions, the future of payments in Canada will be defined by collaboration among regulators, financial institutions, technology providers, and end users. Together, these forces are shaping a transformative payment landscape, where innovation and user-centric solutions will drive sustained growth and global competitiveness.
To learn more about payment trends in Canada, including the upcoming 2025 Canadian Payment Methods and Trends report, which will be released this fall, please visit payments.ca/research.
