Eleven percent of Canadians would use Apple Pay at least weekly once it launches
Interest in wearables and other connected commerce on the rise
TORONTO, Oct. 20, 2015 /CNW/ - Although mobile payments awareness is on the rise, Canadians are lagging their U.S. counterparts when it comes to both awareness and adoption, with only 10 percent of Canadians using their mobile phones to make payments at least weekly, compared with 19 percent of their U.S. peers, according to a new report from Accenture (NYSE: ACN).
Based on a survey of 4,000 smartphone users in the United States and Canada, the report— the 2015 North America Consumer Digital Payments Survey – found that 40 percent of Canadian consumers know that they can use their phones as a payment device, up from 35 percent last year, but still lower than the 53 percent of their U.S. peers who are aware now (up from 43 percent last year).
"Canadian consumers are becoming increasingly aware that they can make payments through their phones, but haven't yet put away their cash and cards," said Jonathan Magder, Canadian Payments lead at Accenture. "Canadians already tap and pay for purchases today with the very same terminals that can also be used for mobile payments with our phones. This is a clear indicator to banks and retailers that although the digital transformation in payments is progressing, there is still a long way to go before we reach broad market adoption."
When looking at which mobile payment ecosystems are gaining momentum, the survey found that Apple Pay has gained an early leader advantage in the U.S. One year after launching in the U.S., and with its anticipated introduction in Canada, Apple Pay is used for over two thirds (68 percent) of all mobile payments in stores in the U.S., according to the respondents in the study. Meanwhile, in Canada, 11 percent of respondents said they would use Apple Pay at least weekly, once available.
The survey identified two groups of early adopters driving mobile-payments usage: high-income consumers and millennials. Consumers with household income of at least $150,000 are the most-avid adopters, with 38 percent using their phones to make payments at merchant locations at least weekly. Twenty-three percent of millennials—people between the ages of 18 and 34—reported using their phones to make mobile payments at a merchant location at least weekly compared to an average of 18 percent for other age groups.
The survey also identified ways to increase mobile-payment adoption rates—namely, by giving consumers better security, incentives and rewards. More than three-quarters of consumers who currently make mobile payments said they would increase their usage if offered discount pricing or coupons based on past buying behavior (cited by 79 percent of users) and if they received reward points (cited by 73 percent). Most Canadian users of mobile payments would also increase the amount they use their phones to make payments for public transit (74 percent) if they received points towards free trips. Additionally, more than half of Canadians not currently making mobile payments would make them if offered discount pricing or coupons (cited by 53 percent of non-users) or reward points (53 percent).
When looking at emerging trends, the survey showed Canadians had relatively less interest in connected commerce (wearable or connected payment devices), and Peer to Peer (P2P) payments. Even though the payments industry has not yet scratched the surface on the "art of the possible" in connected commerce, 16 percent of Canadian consumers have used a wearable device to make a payment at least once, compared with 22 percent in the U.S. Meanwhile, 13 percent Canadian consumers respondents reported being interested in making a payment through a connected smart device, such as appliances and cars, compared with 20 per cent of U.S. respondents.
The survey also pointed to a higher level of adoption for P2P payments in the U.S., over Canada. In each of Canada and the U.S. the percentage of consumers who had tried P2P payment apps was 46 percent. However, 16 percent of U.S. consumers said they make P2P payments at least weekly, compared with only 9 percent in Canada.
"With almost half of North Americans still using traditional cheques to make payments to other consumers, P2P payments remains poised for potentially strong growth," said Mr. Magder. "Overall, integrating payments with the power that Internet-of-Things technologies can offer promises to usher in a new era of consumer product innovation and retail merchandising."
This survey was conducted for Accenture by Lightspeed Research among 4,000 adults in the United States and Canada between June 15, 2015 and July 15, 2015. The overall margin of error is +/- 1.55 percentage points at the midpoint of the 95 percent confidence level.
Accenture is a global management consulting, technology services and outsourcing company, with more than 358,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world's most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$31.0 billion for the fiscal year ended Aug. 31, 2015. Its home page is www.accenture.com.
Image with caption: "Toward a Future of Digital Payments in Canada: Simple. Personal. Everyday. (CNW Group/Accenture)". Image available at: http://photos.newswire.ca/images/download/20151020_C1241_PHOTO_EN_524400.jpg
Image with caption: "Incentives for non-users to start making mobile payments (CNW Group/Accenture)". Image available at: http://photos.newswire.ca/images/download/20151020_C1241_PHOTO_EN_524398.jpg