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Canadian Consumer Payment Preferences - US - April 2013

Published By :

Mintel

Published Date : Apr 2013

Category :

Banking

No. of Pages : 158 Pages


Mobile payments have been touted as ‘the next great thing’ for several years now, but even with the increased number of options available, adoption rates are still very low. However, as the various players in the industry begin to sort out the legal, technological and marketing issues, innovations are being announced and piloted nearly continually. The added encouragement of the increasing penetration of both smartphones and tablets mean that mobile payment opportunities for Canadian vendors and consumers are on their way.

Some questions answered in this report include:
  • Why aren’t consumers using mobile payments?
  • How can banks and payments brands encourage usage?
TABLE OF CONTENT

SCOPE AND THEMES
Data sources
Consumer survey data
Comperemedia
Abbreviations and terms
Abbreviations
Companies mentioned in this report
EXECUTIVE SUMMARY
The market
Figure 1: Canadian payments volume share, 2008 vs. 2011
Figure 2: Growth in volume of payments, by payment method, 2008-11
Market factors
Figure 3: Unemployment rate in Canada, January 2011-February 2013
Opportunities in payments
Asian population offers opportunity
Figure 4: Smartphone ownership, by race, February 2013
Figure 5: Prepaid card usage for online purchases, by income, February 2013
Figure 6: Attitudes about prepaid cards and controlling spending, by income, February 2013
Figure 7: Interest in prepaid cards as a payment method alternative, by income, February 2013
Challenges to new payment methods
Figure 8: Consumer familiarity with payment method brands, February 2013
Figure 9: Attitudes about payment methods and security, February 2013
The consumer
High-income consumers shop for credit cards with the best rewards program
Figure 10: Reasons for shopping for credit cards, by income, February 2013
The future of mobile payments lies with young people and Asians
Figure 11: Interest in payment method alternatives, by age, February 2013
Figure 12: Interest in payment method alternatives, by race, February 2013
What we think
ISSUES IN THE MARKET
Why aren’t consumers using mobile payments?
Figure 13: Reasons for not using mobile phone as a payment device, by age, December 2011-January 2012
How can banks and payments brands encourage usage?
INSIGHTS AND OPPORTUNITIES
Key points
Figure 14: Smartphone ownership, by race, February 2013
Figure 15: Preferred payment methods for small everyday items, by race, February 2013
Figure 16: Interest in payment method alternatives, by race, February 2013
Prepaid cards
Figure 17: Prepaid card usage for online purchases, by income, February 2013
Figure 18: Interest in using a prepaid card to control spending, by age, February 2013
Figure 19: Interest in using a prepaid card to control spending, by income, February 2013
Figure 20: Specific financial goals for the next two or three years, by age, April 2012
Additional uses for NFC technology will increase use of mobile wallets
Strategic partnerships are crucial
TREND APPLICATIONS
Trend: Access All Areas
Figure 21: Interest in alternative uses for mobile phones, by age, February 2102
Trend: Attention Economy
Figure 22: Reasons for shopping or applying for a credit card, by income, February 2013
Mintel Futures: East Meets West
Figure 23: Attitudes about payment method security, by race, February 2013
MARKET SIZE
Key points
Number and size of payments have increased
Figure 24: Rate of payments growth, 2008-11
Canadian payments market increased 5.3% in dollar volume
Figure 25: Canadian payments market, by dollar value, 2010-11
Figure 26: Canadian payments market, by transaction volume, 2010-11
Canada’s population is increasing
Figure 27: Canada’s population by province, 2012, 2032
COMPETITIVE CONTEXT
Key points
Payment brands largely unknown
Figure 28: Consumer familiarity with payment method brands, February 2013
NFC vs. the “cloud”
Payments industry is fragmented
SWOT analysis of leading companies in the mobile payments industry
RBC
Bank of Nova Scotia
Bank of Montreal (BMO)
PayPal
V.me by Visa
SEGMENT PERFORMANCE
Key points
E-Wallets and prepaid cards show explosive growth
Figure 29: Growth in volume of payments, by payment method, 2008-11
Figure 30: Canadian payments volume share, 2008 vs. 2011
Debit cards
Figure 31: Number of debit transactions processed by Interac, 2002-11
Figure 32: Total dollar value of debit transactions processed by Interac, 2002-12
MARKET DRIVERS
Key points
Unemployment is trending down
Figure 33: Unemployment rate in Canada, January 2011-February 2013
Figure 34: Number of employed people, January 2011-February 2013
Canadians continue to take on debt
Figure 35: Average consumer debt, Q4 2011-Q4 2012
Housing market is slowing
Demographics of smartphone ownership will benefit mobile payments
Figure 36: Smartphone ownership, by age, February 2013
LEADING COMPANIES
Key points
Visa leads MasterCard in total payment volume
Figure 37: Total debit, credit and charge payment volume in Canada for Visa and Mastercard, as of December
31, 2008-12
Figure 38: Credit and charge volume in Canada, Visa and MasterCard, 2008-12
Figure 39: Debit card volume in Canada, Visa and MasterCard, 2008-12
INNOVATIONS AND INNOVATORS
Key points
Rogers and CIBC partner to offer mobile payments
Telus announces roll-out of new payment option
MasterCard introduces MasterPass
Facebook gift cards
MARKETING STRATEGIES
Key points
Figure 40: Total estimated mail volume for credit card offers, Q4 2010-Q4 2012
Capital One and TD Bank Financial Group are top credit card mailers
Figure 41: Top credit card acquisition mailers, January 2013
Figure 42: Share of direct mail acquisition with rewards, Q4 2010-Q1 2013
Points rewards are offered more than others
Fee-based offers increase
Figure 43: Share of fee-based card offers, Q4 2010-Q1 2013
Credit and debit cards
Figure 44: Capital One print ad, 2013
Figure 45: TD Bank Financial Group direct mail ad, 2013
Figure 46: RBC Virtual Visa direct mail ad, 2013
Figure 47: RBC online ad, 2013
Figure 48: Scotiabank television ad, 2013
Chequing accounts
Figure 49: Mechanics Bank online ad, 2012
Figure 50: First calgary chequing account direct mail ad, 2013
Figure 51: First Bank online ad, 2013
Mobile payments
Figure 52: Visa payWave print ad, 2012
Figure 53: CIBC mobile payment app statement mailing, 2012
Figure 54: Barclays’ Pingit online ad, 2013
Figure 55: PNC Bank Virtual Wallet online ad, 2012
FINANCIAL PRODUCT OWNERSHIP
Key points
Chequing accounts are most popular product
Figure 56: Ownership of insurance and financial products, by household income, February 2013
Figure 57: Ownership of insurance and financial products, by gender and age, February 2013
CONSUMER PAYMENT PREFERENCES BY TYPE OF PURCHASE
Key points
Different payment methods for different transactions
Figure 58: preferred payment method, by type of purchase, February 2013
Purchasing small ticket items
Figure 59: Preferred payment method for small everyday items, February 2013
Figure 60: Preferred payment method for small everyday items, by age, February 2013
Figure 61: Preferred payment method for small everyday items, by household income, February 2013
Figure 62: Preferred payment method for small everyday items, by province, February 2013
Purchasing medium ticket items
Figure 63: Preferred payment method for medium ticket items, February 2013
Figure 64: Preferred payment method for medium ticket items, by household income, February 2013
Figure 65: Preferred payment method for medium ticket items, by race, February 2013
Purchasing large ticket items
Figure 66: Preferred payment method for large ticket items, overall, February 2013
Figure 67: Preferred payment method for large ticket items, by gender and age, February 2013
Payment for purchases made online
Figure 68: Preferred payment method for purchases made online, overall, February 2013
Figure 69: Preferred payment method for purchases made online, by age, February 2013
Payment of bills
Figure 70: Preferred payment method for bills such as mortgage and utilities, overall, February 2013
Figure 71: Preferred payment method for bills such as mortgage and utilities, by age, February 2013
Figure 72: Preferred payment method for bills such as mortgage and utilities, by race, February 2013
Payment to family and friends
Figure 73: Preferred payment method for money owed to family and friends, February 2013
Figure 74: Preferred payment method for money owed to family and friends, be gender and age, February
2013
BRAND FAMILIARITY
Key points
PayPal leads all brands in familiarity
Figure 75: Familiarity with payments brands, by gender, February 2013
Figure 76: Familiarity with payments brands, by gender and age, February 2013
Figure 77: Familiarity with payments brands, by race, February 2013
CREDIT CARD OWNERSHIP AND PAYMENT BEHAVIOR
Key points
Most consumers have at least one credit card
Figure 78: Type of credit card owned and payment behavior, by age, February 2013
SHOPPING FOR CREDIT CARDS
Key points
Reasons for shopping for credit cards
Figure 79: Reasons for applying for credit card, by age, February 2013
Figure 80: Reasons for applying for credit card, by gender and income, February 2013
ATTITUDES TOWARD CREDIT AND DEBIT CARD USAGE
Key points
Credit and debit card usage preferences
Figure 81: Attitudes toward credit and usage of credit and debit cards, by household income, February 2013
Figure 82: Attitudes toward credit and usage of credit and debit cards, by gender and age, February 2013
PERCEPTIONS OF SECURITY OF VARIOUS PAYMENT METHODS
Key points
Mobile phones not seen as very secure
Figure 83: Attitudes about payment method security, by gender, February 2013
Figure 84: Attitudes about payment method security, by age, February 2013
Figure 85: Attitudes about payment method security, by gender and income, February 2013
Figure 86: Attitudes about payment method security, by race, February 2013
INTEREST IN ALTERNATIVE PAYMENT METHODS AND FEATURES
Key points
Interest in low-fee prepaid cards is higher than in mobile alternatives
Figure 87: Interest in payment method alternatives, by gender, February 2013
Figure 88: Interest in payment method alternatives, by age, February 2013
Figure 89: Interest in payment method alternatives, by race, February 2013
INTEREST IN ALTERNATIVE USES FOR MOBILE PHONES
Key points
Interest in additional uses of mobile phones
Figure 90: Interest in alternative uses for mobile phones, by gender, February 2013
Figure 91: Interest in alternative uses for mobile phones, by age, February 2013
Figure 92: Interest in alternative uses for mobile phones, by race, February 2013
CLUSTER ANALYSIS
Credit Dependents
Demographics
Characteristics
Opportunity
Conventional Shoppers
Demographics
Characteristics
Opportunity
Debit Adopters
Demographics
Characteristics
Opportunity
Cluster characteristics
Figure 93: Target clusters, February 2013
Figure 94: Financial products owned, by target cluster, February 2013
Figure 95: Preferred payment method for purchasing small everyday items such as gasoline & food, by target
clusters, February 2013
Figure 96: Preferred payment method for purchasing medium priced ticket items, by target clusters, February
2013
Figure 97: Preferred payment method for purchasing large ticket items such as a television or furniture, by
target clusters, February 2013
Figure 98: Preferred payment method for online purchases, by target clusters, February 2013
Figure 99: Preferred payment method for paying bills such as mortgage payments or utilities, by target
clusters, February 2013
Figure 100: Preferred payment method for paying money owed to family, friends, baby sitters, etc, by target
clusters, February 2013
Figure 101: Familiarity with payments brands, by target clusters, February 2013
Figure 102: Types of cards owned and payment behavior, by target clusters, February 2013
Figure 103: Attitudes toward using credit or debit cards, by target clusters, February 2013
Figure 104: Level of concern about security for various payment methods, very or somewhat concerned, by
target clusters, February 2013
Figure 105: interest in payment method alternatives, by target clusters, February 2013
Figure 106: Interest in alternative uses for mobile phones, by target clusters, February 2013
APPENDIX – ADDITIONAL CONSUMER TABLES
Figure 108: Smartphone ownership, by household income, February 2013
Figure 109: Smartphone ownership, by gender and age, February 2013
Figure 110: Smartphone ownership, by race, February 2013
APPENDIX – TRADE ASSOCIATIONS
APPENDIX: RESEARCH METHODOLOGY
CONSUMER RESEARCH
Primary Data Analysis
Sampling
Global Market Insite (GMI)
Secondary Data Analysis
Experian Simmons National Consumer Studies
Statistical Forecasting
Statistical modelling
Qualitative insight
The Mintel fan chart
Weather analogy
APPENDIX: WHAT IS MINTEL?
Mintel provides industry-leading market intelligence
Mintel Solutions:
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Mintel GNPD
Mintel Inspire
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Mintel Menu Insights
Mintel Research Consultancy
Mintel Comperemedia 

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