Payments Canada announced its annual Canadian Payment Methods and Trends 2021 report, which analyzes 20 billion payment transactions made in 2020 to dissect trends transforming the Canadian payment landscape.
What was noteworthy for prepaid in that report is that prepaid ranked second among payment methods for percentage of total payment volume growth — boasting a 34.2% payment volume growth between 2015 and 2020. Prepaid also had the second highest growth in percentage of total payment value at 32.7% growth in that same time period. Although prepaid accounted for the smallest percentage of payment volume, compared to seven other payment methods, the rate of growth is worth noting. Prepaid continues to innovate across the digital payments ecosystem as it offers a cost-effective, regulatory-friendly replacement for cheques and paper cheques (a category that’s seeing more than a 50% drop in payment volume in that same five-year period).
“2020 marked a year of accelerated digital adoption fuelled by the pandemic,” Cyrielle Chiron, Chief Strategy Officer, Payments Canada, said in that report. “While overall spending decreased due to concerns about the economy and personal spending, Canadians spent more online, evidenced by a significant increase in e-commerce transactions. Government “stay-at-home” orders and brick-and-mortar business closures restricted the ability for Canadians to make in-person purchases — and changed the way they transacted once they could. We also saw a sharp increase in preference for contactless payment options at point of sale, including cards, phones and wearables. There’s no doubt that these shifts in payment preferences are here to stay — and innovation will continue to evolve the payments landscape.”
Prepaid solutions provide an easy path to digital payments innovation for companies looking to integrate embedded finance solutions quickly — while satisfying regulatory requirements. Prepaid’s ability to innovate quickly, thanks in part to low regulatory hurdles, has cemented its place as part of the digital payments market.The report also pointed toward the shift in credit and debit card usage as consumer spending habits changed. According to the report: “Despite an increase in credit card use as part of an e-commerce boom (which demonstrated 20 percent year-over-year growth in 2020), credit card use declined by 11 per cent and debit card use declined by nine per cent year-over-year.”
“The payment landscape continues to evolve at a rapid pace and the fundamentals of what Canadian consumers and businesses want have not changed,” Tracey Black, President and CEO of Payments Canada, said in the report. “Canadians want convenient and secure payment options. Security and efficiency are the guiding pillars for Payments Canada’s continued evolution of Canada’s payments systems.”