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Credit Cards - Canada - September 2015

Published By :

Mintel

Published Date : Sep 2015

Category :

Banking

No. of Pages : N/A

Although the credit card market in Canada is highly saturated, there are pockets of opportunity such as younger consumers and LGBTs for companies to tap into.

Table of Content

Introduction

Methodology
Abbreviations
Regional classifications
Income

Executive Summary

The market
Canada’s debit and credit card market continues to grow strongly
Market factors
Canada’s economy is in a technical recession
Outlook on the real estate and housing market
Household debt in Canada
Canada’s population is expected to age in the coming years
Companies, brands and innovation
The consumer
Most Canadians have a credit card, peaking among older consumers
Figure 1: Ownership of credit cards, July 2015
RBC, BMO and TD are the top three choices for credit cards
Figure 2: Choice of FI for primary credit card, July 2015
No annual fee, easy-to-earn rewards and ease of redemption are the top three factors
Figure 3: Factors influencing choice of credit cards, July 2015
Most consumers manage their credit cards online and pay off their balance in full every month
Figure 4: Agreement with usage habits regarding credit cards, July 2015
Young males more willing to pay a higher fee for better rewards
Figure 5: Summary of attitudes about credit cards, July 2015
What we think

Issues and Insights

Finding untapped segments in a largely saturated market
The facts
The implications
The evolution of rewards
The facts
The implications
New credit scoring models and marketplace lending will attract customers
The facts
The implications
Pre-paid cards, supplemental products and non-reward benefits remain opportunities
The facts
The implications

Trend Application

Trend: FSTR HYPR
Trend: Let’s Make a Deal
Trend: Nouveau Poor

Market Factors

Key points
Economic overview
Canada’s economy is in a technical recession
Figure 6: Canada’s GDP, by quarter, Q4 2008-Q4 2014
Figure 7: Household disposable incomes and savings in Canada, by quarter, Q4 2008-Q4 2014
Figure 8: Canada’s unemployment rate, by gender, 2008-15
Impact of interest rates, inflation and exchange rates
Figure 9: Inflation rates in Canada (%), 2004-14
Bank of Canada cuts interest rate to 0.5%
Figure 10: Canada bank rate by month, 2005-15
Outlook on the real estate and housing market
Consumer confidence
Figure 11: Consumer Confidence Index, monthly, January 2008-February 2015
Household debt in Canada
Demographic overview
Population count and growth in Canada
Figure 12: Share of population of Canada, by territory/province, 2015 (projected)
Minority groups account for less than 20% of Canada’s population
Figure 13: Estimated population of Canada, by ethnicity, 2011
Canada’s population is expected to age in the coming years
Figure 14: Population aged 65 years and over in Canada, historical and projected (% of total), 1971-2061
Figure 15: Projected trends in the age structure of the Canada population, 2014-19

Who’s Innovating?

Key points
Start-ups focus on alternative models of credit scoring
Credit scoring companies test the use of alternative data to determine “new” credit scores
Canadian Tire will be among the first retailers in North America to test proximity-based retailer information cards in Google Now.
Quantum credit cards that are “impossible” to hack
Nymi, TD and MasterCard announce the world's first biometrically authenticated wearable Payment using the human heartbeat

Market Size and Forecast for Credit and Debit Cards

Key points
Canada’s debit and credit card market continues to grow strongly
Figure 16: Value of debit and credit card market ($ billions), forecast, 2015-20
Forecast
Figure 17: Forecast of values of transactions in the Canadian debit and credit card market ($ billions), 2010-20
Forecast of volumes of debit and credit card market
Figure 18: Volume of debit and credit card market in circulation (millions), forecast, 2015-20
Figure 19: Volume of debit and credit card market (millions), forecast, 2015-20
Forecast methodology

Companies and Products

TD Financial Group
Overview and company information
Recent activity
RBC
Overview and company information
Recent activity
Scotiabank
Overview and company information
Recent activity
American Express
Overview and company information
Recent activity
Capital One
Overview and company information
Recent activity
Desjardins
Overview and company information
Recent activity and innovation

Brand Communication and Promotion

Key points
Capital One is the most active direct mailer
Figure 20: Credit card acquisition mail volume, by company, July 2014 to July 2015
Noteworthy brand campaigns
TD Donates to LGBT organizations for every dollar spent during Pride
Visa gets poetic in a new campaign for infinite card
MasterCard showcases its wide acceptance
Selected direct mail campaigns from Mintel’s Comperemedia
Capital One Guaranteed MasterCard
American Express Gold from Scotiabank

Brand Research and Social Media

Key points
Market overview
Key social media metrics
Figure 21: Key social media metrics, September 2015
Brand usage and awareness
Figure 22: Brand usage and awareness for selected credit card providers, July 2015
Interactions with credit card providers
Figure 23: Interactions with selected credit card providers, July 2015
Social media activity and campaigns
What we think
Online conversations
Figure 24: Online conversations for selected credit card providers, by day, September 14, 2014-September 14, 2015
Where are people talking about credit card providers?
Figure 25: Online conversations for selected credit card providers, by page type, September 9, 2014-September 9, 2015
What are people talking about?
Figure 26: Topics of conversation around selected credit card providers, 9 September, 2014- 9 September, 2015

The Consumer – Ownership of Credit Cards

Key points
Most Canadians own and use a credit card
Figure 27: Ownership of credit cards, July 2015
Seniors have the highest card ownership
Figure 28: Card ownership, by age, July 2015

The Consumer – Choice of Financial Institution

Key points
RBC, BMO and TD are the top three choices for credit cards
Figure 29: Choice of FI for primary credit card, July 2015
Desjardins primary card holders most likely to prefer using card used by their main financial institution
Figure 30: Preference to use card offered by main FI (any agree), by customers of each FI, July 2015
Amex, Desjardins and RBC card holders most satisfied with their customer service
Figure 31: Customer service opinions (any agree), by customers of each FI, July 2015

The Consumer – Choice Factors

Key points
No annual fee, easy-to-earn rewards and ease of redemption are the top three factors
Figure 32: Factors influencing choice of credit cards, July 2015

The Consumer – Channels for Acquisition

Key points
Bank branches remain the top channel to acquire a credit card
Figure 33: Channels used for card acquisition, July 2015
Online channels relatively more popular with younger consumers
Figure 34: Channels of acquisition (net), July 2015

The Consumer – Usage Habits

Key points
Most consumers manage their credit cards online and pay off their balance in full every month
Figure 35: Agreement with usage habits regarding credit cards, July 2015
Males more likely to pay off their balance in full
Figure 36: Usage habits, significant differences by gender, July 2015
Younger card users more likely to have used a prepaid card, switched their primary card and withdrawn cash
Figure 37: Usage habits, significant differences by age, July 2015

The Consumer – Attitudes about Credit Cards

Key points
Summary of attitudes
Figure 38: Summary of attitudes about credit cards, July 2015
Young males more willing to pay a higher fee for better rewards
Figure 39: Attitudes about rewards and supplemental card products, July 2015
Females more likely to be stressed about unpaid card balances
Figure 40: Attitudes about shopping with credit cards, July 2015
Younger consumers and Atlantic Canadians prefer to use the card offered by their main FI
Figure 41: General opinions about credit cards, July 2015

The Consumer – Chinese Canadians and Credit Cards

Key points
Chinese Canadians more likely to pay off balance in full and less interested in using debit cards
Figure 42: Usage habits (select), Chinese Canadians vs Overall Population, July 2015
Cash-back feature ranks high in popularity among Chinese Canadians
Figure 43: Choice factors, Chinese Canadians vs Overall Population, July 2015

The Consumer – Target Groups

Key points
Four target groups
Figure 44: Four target groups, July 2015
Reluctant Users (34%)
Prudent Spenders (24%)
Traditionalists (21%)
Enthusiasts (20%)

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