Contactless payments are rolling out rapidly in Canada, and are likely to account for significant transaction volumes and values by 2016, predicts Technology Strategies International (TSI). According to the recently released market research report entitled ‘Canadian Payments Forecast – 2012’, there is also strong interest in mobile payments (m-payments), although over the next few years this is likely to ride on the back of contactless rollout.
The study found that consumer payments have rallied after the recession and all electronic forms of payment were experiencing substantial growth. The main growth drivers in the Canadian market have been increasing personal expenditure on consumer goods and services, and the increasing penetration of electronic payments (e-payments) into strongholds previously reserved for cash and, to a lesser extent, cheques.
“Cash, as a means of payment, is increasingly under threat,” said Christie Christelis, president of TSI. “By 2016 we expect to see a substantial reduction in cash transaction volumes, mainly as a result of increased penetration of contactless payments in Canada – which includes mobile contactless payments.
“Cheques have all but floundered as a consumer payment instrument, and much of the consumer cheque payment repertoire has been substituted with online bill payments,” he said. “Open-loop prepaid cards and closed loop-gift cards are also increasing in popularity, with strong growth predicted over the next five years.”
The study found that the period of regulatory uncertainty in the Canadian payments industry is expected to continue for the next few years, inhibiting the innovation strategies of some key players.
“The Ministry of Finance’s response to the Payments System Review Task Force recommendations was underwhelming,” Christelis said, “with very little clear direction being given as to what the payments industry can expect in terms of regulatory oversight in the near future.”
Some highlights from the study include:
- Contactless payments have continued to extend their reach over the past two years, achieving a substantial penetration level in appropriate payment settings. Interac’s Flash is expected to make an impact in the next two years.
- Smartphone penetration is increasingly rapidly, and by 2016 almost 80% of the smartphones in Canada will be near field communication (NFC)-enabled, providing a solid foundation for the uptake of mobile contactless payments.
- The closed-loop gift card market is expected to expand rapidly, accounting for about C$5bn in redeemed value in 2016.
- Cash will remain the most frequently used form of payment in Canada over the next five years, but will suffer substantial erosion from contactless debit and credit payments.
The annual BNP Paribas Cash Management University kicked off on Thursday morning with treasury professionals congregating in Paris from across Europe.
APIs may be a solution to MT940 challenges, says Karen Fagan, treasury operation manager, for British television company, ITV.
Kicking off the first day of the Singapore Fintech Festival, issues with cryptocurrencies were addressed by MIT media labs director, Joi Ito, and panels of technology leaders discussed how they’re using data analytics.
Sibos 2017 day two highlights: Brexit and banking, and why ‘data is the new oil’ in financial services
How nation first politics can impact global financial organisations It’s clear that data and regulation are the two key topics that are ... read more