Canadian consumers cautiously optimistic about financial outlook – but continue to tighten spending

Published: November 3, 2021

Radical shift in purchasing behaviours since the onset of COVID-19 continues, reveals new Payments Canada study

  • 85% of Canadians believe they will be the same or financially better off 12 months from now
  • More than half (56%) of Canadians spending less overall; 50% making more e-commerce purchases 

Despite the economic turbulence from the pandemic, new data from Payments Canada indicates that Canadians feel that the worst may be behind them and are cautiously optimistic about their financial well-being. While 56% say they continue to spend less overall since the onset of COVID-19 (on par with six months ago at 58%), nearly one in three (29%) believe they will be better off financially 12 months from now and 36% believe that Canada’s economy will be in better shape 12 months from now. A further 56% of Canadians expect to be in a similar financial situation in 12 months, and 37% believe the economy will be the same a year from now.

“While spending levels remain low, the new data infers that Canadians see a light at the end of the tunnel in terms of their financial well-being,” said Cyrielle Chiron, Chief Strategy Officer of Payments Canada. “Now, around 18 months since a state of emergency was declared in Canada, we continue to see the prevalence of a number of pandemic fuelled payments trends. At the core, Canadians’ concerns around the physical handling of cash and payments terminals has catapulted a shift towards digital and contactless payment preferences. We are also seeing increases in e-commerce use. While the pandemic may have accelerated these trends, the reality is that payments innovation continues to change the way we make transactions.”

The study provides a moment-in-time perspective on Canadian spending behaviours compared to pre-pandemic, and acts as a follow-up to prior study waves in May, September and December 2020. The new data points to the continuation of a number of payment trends observed through 2020, including:

Continued shift towards preference for contactless and digital payments

  • 42% of Canadians say the pandemic has changed their payments preferences to digital and contactless for the long-term, consistent with six months ago.
  • 57% say they are using cash less, compared to 53% six months prior.
  • 35% are using cheques less, the same as six months ago. 
  • 42% are tapping their debit card and 43% are tapping their credit cards more against payment terminals, compared to 42% and 47% respectively six months prior.  
  • 32% tend to avoid shopping at places that don’t accept contactless, compared to 37% six months ago.
  • 55% try to avoid going over the limit to enable contactless payments, compared to 54% six months prior.

Concern over physical handling for payments continues to be prevalent among Canadians

  • 34% say they are uncomfortable handling cash, compared to 38% six months prior.
  • 32% are uncomfortable when they have to touch a debit or credit card payment machine, down slightly from 37% six months prior.
  • 38% are using online banking more than pre-pandemic.
  • 68% are using ATMs less often than they used to, on par with six months prior at 67%.

While spending is down overall, Canadians continue to favour cards and e-transfers

  • 35% are using credit cards more, compared to 33% six months prior.
  • 19% state that they are using debit cards more, compared to 20% six months ago.
  • 28% are using e-transfers more, versus 25% six months prior.

Canadians continue using e-commerce platform for more diverse purchases

  • 50% are using e-commerce platforms to get different products more often than they used to, compared to 49% six months prior.
  • Canadians report using e-commerce for more diverse purchases compared to pre-pandemic; the most prevalent increases in purchase categories include: clothes (52%); household items (43%); food and groceries (38%); health and beauty supplies (36%); electric appliances (27%), and pet food (18%).

Dramatic increase in spend on food and delivery services continues

  • 60% of Canadians report spending more on food than they did pre-pandemic, compared to 58% six months ago.
  • 33% report using food delivery services more often, such as Uber Eats and Instacart, compared to 28% six month prior.
  • More generally, 46% of Canadians are tipping more than they used to, compared to 40% six months ago.

Increase in preference for new payment channels, including wearables, home assistant smart devices, and social media channels

  • Assuming they had the option to make payments from a wearable device such as a watch, fitness tracker or ring, 65% of Canadians said they would be using them either the same or more since the onset of the pandemic.
  • 59% would be either the same or more likely to use a home assistant smart device, such as Alexa/ Google home or a TV, fridge, or car to make a payment.
  • 60% are either the same or more comfortable sending money to a friend or family member using social media channels, such as WhatsApp, Messenger and TikTok.

Concern for fraud and cyber crime impacting payments behaviour and preferences - but Canadians have a high level of confidence that they are protected

  • 50% of Canadians say that fraud and cyber crime concerns impact their payments preferences and behaviour.
  • Even though they are conscious about fraud and cyber crime risks, 66% of Canadians feel protected by their bank, credit union, and/or credit card provider when it comes to making payments.

About the study

The payments 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 1,502 Canadians, 18 years of age or older were interviewed from June 25 - July 9, 2021. The findings in this report are sourced from the Leger/Payments Canada, 2021 Consumer Payments Behaviour Tracker Survey.