Canada’s payment ecosystem reflects its economic stability, tech-savvy population, and government’s push for a digital economy. As we explore the Canadian market, we unveil various payment methods reshaping the retail and e-commerce sectors. In 2023, Canada’s population exceeds 38.8 million, with e-commerce revenue projected to hit US$55.72 billion1​. Now, let’s tread through the payment methods that are facilitating this digital commerce growth:
Payment by card in Canada
In Canada, card payments continue to be a dominant method for both in-store and online transactions. The country saw a decrease in credit card use in 2019 for the first time in seven years, with an 11% decrease in volume and an 8% decrease in the value of credit card transactions. However, in 2020, 93% of Canadians reported owning at least one credit card. The market share of credit cards in terms of transaction volumes indicates a significant role in the Canadian payments landscape​ 3​​ 4​.
Local actor: Interac
Payment by Bank Transfer
Bank transfers are also a popular method for executing payments in Canada. In recent years, online transfers have seen a substantial increase in usage, with a 48% increase in volume and a 40% increase in value from 2019 to 2020. Notable local actors in this domain include Interac and EFTCanada. The growth of online bank transfers is attributed to an increase in e-commerce activities and the convenience associated with digital transactions. There’s also a notable mention of peer-to-peer payments via bank transfer, indicating a growing trend in digital money transfers among individuals​5​​ 6​.
Local actors: Interac, EFTCanada
 
Payment by installment and BNPL
The “Buy Now Pay Later” (BNPL) market in Canada is booming in 2023. BNPL payments are expected to increase by 51.6% on an annual basis, reaching US$2.133 billion 1​. The key players in the market are Afterpay, Sezzle, Affirm, ZIP, PayPal, and Klarna. Growth is driven by increased e-commerce penetration. The Gross Merchandise Value (GMV) of BNPL payments is expected to significantly increase, from US$1.407 billion in 2022 to US$8.311 billion by 2028. Forecasts indicate a CAGR of 31.3% over the period 2023-2028 ​1​. Trends show a growing adoption of BNPL services, with market segmentation based on the type of business model, sales channels, and distribution models. Canadian consumers are increasingly adopting the flexible payment options provided by BNPL, thus offering merchants new opportunities to boost sales.
Local actors: Paybright, Uplift
 
Payment by digital wallet and X-Pay
Digital wallets are gaining popularity in Canada, yet adoption lags behind some other countries. Security worries and unfamiliarity with the technology hinder wider adoption. Financial institutions and tech firms are working to promote digital wallet benefits. They highlight the convenience, speed, and enhanced security features of digital wallets and mobile payments.
Unveil more about global payment methods in our #PayWorldTour library.
