Canadian consumers are increasingly using their smartphones and credit cards to make purchases and turning away from cash, according to a study by GfK.
The market and consumer information researcher conducted an online survey of 1,000 Canadians as part of a larger study on shopping behaviours. Last year, cash accounted for only 25% of Canadian transactions, a decline of two percentage points from 2014.
Credit cards again accounted for 42% of transactions in 2015, unchanged from a year earlier. Debit cards accounted for 28% and mobile device payments at 3%, both categories increasing by a percentage point from 2014.
“We also saw a number of years ago in this country a very concerted effort by the card companies to get people to start using their cards for smaller payments. That clearly has worked,” said Stephen Popeil, vice-president of GfK Canada.
“We’re clearly seeing that the use of cash is getting less and less in this country. Is it ever going to disappear? I don’t think so, because of the nature of certain economies that are out there. But clearly, what we are seeing now is every year fewer and fewer payments are being made with cash.”
GfK’s research suggests that mobile payments tend to be favoured by younger and higher-income Canadians, as well as urban dwellers and consumers with a higher education. However, the payment method is also gaining traction among older generations as more recognise mobile’s benefits of speed and efficiency.
However, the research also revealed concerns over security among consumers; 53% of Canadians agreed they were worried about their personal information when using a mobile-payment app and only 22% said they were confident that mobile device payments were wholly secure.
“We have to figure out as an industry how we’re going to communicate safety and security,” said Popeil. “That’s a challenge, in my mind, for the whole fintech industry.
“In many cases, how do we convince people that divulging certain things about their financial state via these systems is safe and secure? Once we’ve cracked that nut we’re going to see massive uptake on a lot of this.”