Canadian spending and purchase habits have not yet returned to pre-pandemic preferences

44 per cent say COVID-19 has changed their payments preferences to digital and contactless long-term; 61 per cent are spending less; 42 per cent are uncomfortable handling cash

OTTAWA, November 25, 2020 – Payments Canada has released new data on Canadian payment trends since the onset of COVID-19, showing that Canadians continue to spend less overall, and are maintaining a digital-first mindset with continued preference for contactless payment methods. The study provides a moment-in-time perspective on Canadian spending behaviours compared to pre-COVID-19, and acts as a follow-up to the May 2020 study conducted during week five of the pandemic.

The new data indicates that a number of payment trends observed in May 2020 resulting from the pandemic continue, including: the increased use of electronic payments and e-commerce; a preference for contactless and online/mobile banking; and a decline in the use of cash and cheques. Canadians report mixed sentiment around the permanency of these payment preferences. 

Although approximately 34 per cent of Canadians report they do not expect to return to using cash payments to the same extent as pre-COVID once the pandemic recedes, 31 per cent of Canadians expect to use cash payments more often as the economy recovers, even though they have favoured using either digital or contactless payments since the onset of the pandemic. While cash may be reintroduced into Canadian wallets, 44 per cent of those surveyed report that COVID-19 has changed their payments preferences to digital and contactless for the long-term. 

“In this most recent research, about 60 per cent of Canadians report that they continue to spend less than before the pandemic,” said Tracey Black, President and CEO, Payments Canada. “Businesses across Canada are focused on how to best meet consumer needs as the pandemic continues. For many retailers, this includes building and leveraging an online presence and offering convenient and secure payment options for customers at point-of-sale.”

Key study findings include: 

Continued preference for contactless payments

• Approximately 47 per cent of Canadians surveyed report tapping their debit and credit cards more often than pre-COVID, compared to 53 per cent at week five of the pandemic. 
• 40 per cent of Canadians report they are uncomfortable when they have to touch debit or credit card payment machines.
• 36 per cent of Canadians report avoiding shopping at places that do not accept contactless payments, down from 42 per cent in week five.
• 50 per cent of Canadians tried not to exceed the contactless limit when buying something in-store, compared to 52 per cent in week five. 

Reduced handling of cash

• When it comes to accessing money, 64 per cent of Canadians are using ATMs less, an increase since week five of the pandemic (from 61 per cent).
• 42 per cent of Canadians say they are uncomfortable handling cash in general. 

Continued decline in use of cash, cheques and prepaid cards

• Concerns of surface contact with cash and coins have continued to shift merchants and consumers away from cash payments. 
• Compared to pre-COVID use, 57 per cent of Canadians report using cash less (compared to 65 per cent in week five), 32 per cent report using cheques less (down slightly from 35 per cent), and 32 per cent report using prepaid cards less (down from 37 per cent).

Canadians spending less overall, but using credit and debit cards and e-Transfer more frequently

• Around 61 per cent of Canadians report spending less than pre-COVID-19, compared to 75 per cent in week five of the pandemic.
• 32 per cent of Canadians report using credit cards more; 21 per cent report using debit cards more; 25 per cent report using e-transfer more. To note, these payment methods include those using tap and/or through e-commerce.

Leveraging e-commerce platforms

• 48 per cent of Canadians are using e-commerce platforms more often than pre-pandemic. Commonly purchased items include clothes (47 per cent), household items (46 per cent), food and groceries (46 per cent), and health and beauty products (35 per cent).

Prioritizing food delivery services and tipping more 

• When it comes to food delivery services, 29 per cent of Canadians report using services such as Uber Eats and Instacart more often than pre-COVID-19 (up 3 per cent).
• 41 per cent of Canadians reported tipping more (up 12 per cent). 

“There’s no doubt that the COVID-19 pandemic continues to accelerate the adoption of digital and contactless payments with a widespread shift away from paper-based payments,” said Cyrielle Chiron, Head of Research and Strategic Foresight, Payments Canada. “This is a trend we have seen over a number of years, including through Payments Canada’s recently released Canadian Payments: Methods and Trends 2020 report that showed a surge in electronic payments, which represented around 77 per cent of all transactions in 2019. The reality is that Canadian consumers and businesses want more efficient, faster and more secure payment options, so we can expect this trend to continue long-term with a focus on payments innovation.”

Additional information on payments trends in Canada can be found in Payments Canada’s annual Canadian Payments: Methods and Trends Report 2020.

About the study

The payment trends during COVID-19 study was compiled by Payments Canada to help build an understanding of how the Canadian payments landscape has shifted in light of the COVID-19 pandemic. In total 1,501 Canadians, 18 years of age or older were interviewed from September 8 to September 16, 2020. The findings in this report are sourced from the Leger/Payments Canada, 2020 Consumer Payments Behaviour Tracker Survey. 

About Payments Canada

Payments Canada ensures that financial transactions in Canada are carried out safely and securely each day. The organization underpins the Canadian financial system and economy by owning and operating Canada’s payment clearing and settlement infrastructure, including associated systems, bylaws, rules and standards. The value of payments cleared and settled by Payments Canada in 2019 was over $55 trillion or $218 billion each business day. These encompass a wide range of payments made by Canadians and businesses involving inter-bank transactions, including those made with debit cards, pre-authorized debits, direct deposits, bill payments, wire payments and cheques. Payments Canada is a proud supporter of the Catalyst Accord and the 30% Club.

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