Canada reaches $11.7 trillion in payment transactions in 2022 - up 7% in value from 2021

Credit card use grew 30% while cash use declined 41% over last 5 years, Payments Canada study reveals

Key study highlights:

• While total payment volume declined 2% compared to 5 years ago, total payment value increased by 21%.
• Credit cards represent 33% of payment volume in 2022, followed by debit cards (31%); electronic funds transfer (15%); cash (10%); online transfer (5%); cheque, automated banking machine (ABM) and prepaid cards (all at 2%).
• Cash use recovered to pre-pandemic levels, with 1 in 10 transactions paid in cash in 2022.
• Almost 9 in 10 (89%) Canadians tapped a payment card at least once a month for a store purchase in 2022.
• For the first time, online transfer payments surpassed personal EFT (electronic funds transfer) based on volume.
• 1.06 billion e-transfers were sent in 2022, up 11% in volume from 2021.
• Nearly half (48%) of existing buy now, pay later (BNPL) users increased usage in 2022.
• While 49% of Canadians are aware of cryptocurrencies, only 14% have used cryptocurrency, primarily as an investment rather than for payment purposes.

OTTAWA, ON, Oct. 5, 2023 /CNW/ - Today, Payments Canada released its annual Canadian Payment Methods and Trends 2023 report, which analyzes 20.5 billion payment transactions made in 2022 totaling $11.7 trillion (more than $475 billion every business day) and highlights the trends shaping the Canadian payment landscape.

Year-Over-Year Trends: Credit and debit cards continue to be the top two payment methods

One-year and five-year Canadian payment transaction volume trends (CNW Group/Payments Canada)

One-year and five-year Canadian payment transaction value trends (CNW Group/Payments Canada)

Transaction volumes and values across all payment types, with the exception of cheques, experienced year-over-year growth in 2022.

• Credit cards represented 33% of all payment volumes in 2022, followed by debit cards (31%); electronic funds transfer (15%); cash (10%); online transfer (5%); cheque (2%); ABM (2%); prepaid cards (2%).
• Electronic funds transfer represented 59% of total payment value in 2022, followed by cheques (28%); credit cards (6%); debit cards and online transfers (both 3%); ABM (1%); cash (0.5%); prepaid cards (0.2%).
• Online transfer continued to be the fastest-growing payment type with year-over-year volume growth of 11% and value growth of 19% from 2021. Interac e-Transfer continued to dominate the online transfer payment segment with more than three in five Canadians (61%) using Interac e-Transfer to either send or receive a payment in a given month.
• Credit card volume increased 5%, while debit card volume increased 6% year-over-year in 2022 compared to 2021.
• The average credit card transaction value was $99, while the average debit card transaction value was $47.
• Cash use grew 2% in volume, with the average cash transaction value at $29.

Five Year Trends: Online transfer continued to be the fastest -growing payment type

While total payment volume declined by 2% compared to five years ago, total payment value increased by 21% during this same period.

• While online transfers represent a small portion of total payment volume, they experienced the highest growth of any payment method over the past five years (328% in payment volume and 314% in payment value) and are poised to overtake cash.
• Within the card space, credit and prepaid cards lead the way in terms of volume growth at 23% and 19% respectively.
• Debit card volume increased by 9% .
• Cash and cheque transaction volumes decreased by 59% and 45% .

"We have seen a dramatic shift towards digital payment options over the past five years. Evolving technologies will continue to influence how Canadians make and receive payments," said Tracey Black, President and CEO of Payments Canada. "Payments Canada continues to work collaboratively with the payment ecosystem to provide Canadians and Canadian businesses with convenient, safe and efficient payment options." 

Evolving payment innovations and future outlook

Canadians are increasingly comfortable using digital payments and are embracing frictionless payment experience as the number of digital payment options continues to grow.

• Although cash use has declined over the past five years, cash will still be used as a store of value and means of payment. Close to half of all consumers (49%) and businesses (46%) in Canada believe that retail outlets will be completely cashless in the next ten years. Yet, two out of five consumers and businesses (45% and 41%, respectively) would feel uncomfortable if they could not use cash for making purchases.
• Credit card usage is well positioned to grow as Canadians continue to embrace mobile payments at the point-of-sale and mobile commerce. In 2022, 57% of mobile wallet users in Canada reported using their credit card(s) linked to their mobile wallet for their purchases.
• Prepaid cards are expected to experience the highest growth in both volume and value over the next few years compared to all other payment cards. Prepaid card usage increased among Canadian youth (14-18 years) as parents leveraged open-loop cards to provide an allowance and to track spending, in addition to international students spending money received from home. Innovation will continue to transform the prepaid card space with solutions ranging from remittance cards and gift cards to cryptocurrency payments.
• Thinking about the future of digital payments, 65% of Canadians would send their payments in real-time if the option was available. The top three use cases for sending payments in real-time are paying a credit card bill, government taxes and rent.

"In 2022, Payments Canada published ISO 20022 messages for Lynx and the upcoming Real-Time Rail (RTR). The ISO 20022 message standard supports data-rich payments - more information about the payment traveling with the payment. ISO 20022 will support enhanced and new payment experiences for Canadian businesses and consumers. Payments Canada will continue to drive innovation to ensure payments are easier, smarter and safer for all Canadians."

Download the full report.

About the study
Payments Canada worked closely with payment service providers, payment consultants and researchers to compile a comprehensive 2022 data set and provide insights into how Canadian consumers and businesses pay. The general methodology involves a combination of industry data and market research. Industry data is derived primarily from the Automated Clearing Settlement System (ACSS) data, industry payment card usage data and quantitative and qualitative market research sources. Data is also collected from payment service providers and payment networks on an aggregated annual basis, based on actual payment instrument usage data. Survey research is used to fill data gaps and provide detailed insights.

About Payments Canada
Payments Canada is a public purpose organization that owns and operates Canada's payment systems, Lynx and the Automated Clearing Settlement System (ACSS). Payments Canada is responsible for the physical infrastructure and the associated by-laws, rules, and standards that support these systems. It also has a duty to promote the efficiency, safety, and soundness of Canada's payment systems while taking into account the interests of end users. In 2022, Payments Canada's systems cleared and settled over $119 trillion—more than $476 billion every business day. Transactions that pass through these systems include debit card payments, pre-authorized debits, direct deposits, bill payments, wire payments and cheques initiated and received by Canadians and Canadian businesses. Payments Canada is working closely with the payment ecosystem to modernize Canada's payment systems to ensure Canada and Canadian businesses remain globally competitive.

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SOURCE Payments Canada