– Remote payments dominate mobile payments landscape –
(Oakville, Ontario – October 3, 2018) —
Almost six out of ten Canadian smart phone owners have made a mobile payment, either in-store or remotely, in the past year, according to a new study published by Technology Strategies International Inc. The report titled, Canadian Payments Forecast, 2018, predicts that the total number of consumer mobile payment transactions is expected to grow by 27% p.a. (CAGR) over the next five years.
“Mobile payments are dominated by bill payments and transfers on mobile banking apps or the mobile web, with almost one third of smart phone owners having conducted bill payments or transfers on their phones in in the first half of 2018,” says Christie Christelis, President of Technology Strategies International.
“Over the past few years there have been high expectations amongst industry players that mobile payments would take off,” he says, “but we are only now entering a regime where the business models, payment apps and consumer interest have started to align.”
One in five smart phone owners conducted an in-store mobile payment during the first half of the year, less than the proportion that had made either P2P payments or online payments for web purchases over this period, says the report. Next to mobile banking apps and PayPal, the Starbucks app has the highest penetration amongst smart phone users.
Smart phone owners have become more and more comfortable with using their phones to conduct financial transactions over the past few years, setting the stage for in-store payments to gain traction, Christelis says. However, he cautions that consumers are not necessarily looking for alternative ways to pay in Canada, and to date the most success with in-situ mobile payments has been achieved when then payment component of the transaction is an insignificant, yet integral, element of the service delivered, as is the case with Uber and Starbucks, for example.
The report notes that mobile payment apps like Apple Pay, Android Pay and Samsung Pay are slowly increasing their penetration in Canada but are still far from mainstream. However, the number of NFC-phones in Canada will outstrip non-NFC phones for the first time in 2018, setting the stage for increased mobile payment penetration when consumers come on board.
Additional highlights from the study are:
- Debit and credit card payments accounted for almost 63% of personal consumption expenditure in 2017
- The value of contactless payments grew by 47% in 2017, and accounted for more than 15% of the combined value of debit, credit and cash consumer payments
- The number of credit card transactions are expected to outstrip the number of cash payment transactions for the first time in 2018
The 260-page report provides a comprehensive statistical compendium, review, analysis and forecast of consumer payments in Canada. It draws on established statistical sources as well the Canadian Consumer Payments Survey, 2018, conducted by TSI amongst more than 2,000 consumers. The report identifies high growth segments in the Canadian payments market in the context of some important recent developments in the economy, the regulatory environment and the industry. Detailed forecasts are presented for credit card payments, debit card payments, cash payments, cheque payments, contactless payments, prepaid cards, gift cards, P2P payments, remittances, online payments, mobile payments, bill payments and transfers, ABM installations and POS terminals.
About Technology Strategies International Inc.
Technology Strategies International Inc. is a leading Canadian technology market research firm based in Oakville, Ontario, Canada. Established in 1997, the company has been tracking developments in Canadian payment industry for the past twenty years. The Canadian Payments Insights series of reports can be found at www.canadianpaymentsinsights.com. For more information on TSI, please see www.tsiglobalnet.com
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