Canada’s debit and credit card payments market will suffer in the immediate future from the worsening worldwide economy, but a new study points out that long term, both forms of payment will capture a greater share of all consumer expenditures. It also projects that contactless payments will see the highest growth spurt over the next five years.
The report from Canadian researcher Technology Strategies International predicts credit card payments will account for 38% of personal consumer expenditures by 2013, double the share predicted for debit cards.
The report, “Canadian Payments Forecast – 2009,” predicts there will be 130 million payment cards in circulation in Canada, with card based payments being accepted at about 720,000 merchants.
“There are a number of high growth segments in the Canadian payments market, the ones with the most promise being mobile contactless payments, cross-border debit and alternative methods for paying online,” said Christie Christelis, president of Technology Strategies.
Key findings include:
- The recession in Canada will result in lower growth for debit and credit card payments as consumers cut back on their expenditure.
- Credit card payments will be hit the hardest by the recession.
- Contactless payments will be the highest growth segment over the next five years, exhibiting phenomenal growth and encroaching on the areas currently dominated by cash and debit cards.
- Card issuers will use the EMV implementation card reissue cycle to issue cards with contactless payment functionality.
- Cross border payments will grow by 70% per year over the next five years.
- Alternative payment mechanisms for online payments (I. e. noncredit card payments) will account for one third of all online payments made by Canadians by 2013.
- Cash will remain the most frequently used form of payment in Canada.