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Consumer Payments and Credit Cards - Canada - November 2017

Published By :

Mintel

Published Date : Nov 2017

Category :

Cards & Payments

No. of Pages : N/A

Awareness of debit card rewards is not high but there are segments that prefer debit so banks can use an attractive rewards program as a first time relationship builder.

Table of Contents

OVERVIEW
Regional classifications
Income
EXECUTIVE SUMMARY
The issues
Credit and cash are the most popular payment methods
Figure 1: Payment methods used, August 2017
TD is the most popular choice for debit; TD & RBC are the leading issuers of credit cards
Figure 2: Choice of FI for debit and credit cards, August 2017
Around one in four 18-24s would prefer to use debit exclusively
Figure 3: Agreement with statements related to debit card usage (% agree), August 2017
Men over-55 more likely to exceed $2,000 in monthly credit card spending
Figure 4: “My average credit card monthly spend exceeds $2,000” (% agree), August 2017
Young males more willing to pay a higher fee for better credit card rewards
Figure 5: Agreement with statements related to credit card rewards, August 2017
The opportunities
Debit can be the starting point of a lifelong relationship
Figure 6: Agreement with statements related to debit card rewards, (% agree), August 2017
Three in five consumers prefer to use the card offered by their main FI
Figure 7: Agreement with statements about credit cards, August 2017
Building a win-win relationship with high credit card spenders
Figure 8: Agreement with statements related to credit card usage (% agree), 18-44s vs over-45s, August 2017
What it means
MARKET FACTORS – WHAT YOU NEED TO KNOW
Canada’s population is aging
Canada will become increasingly diverse
Growth in smartphone ownership a boon for mobile banking
Financial concerns can lead to cautious spending habits
High participation in loyalty programs drives credit card ownership
Awareness of mobile payment high; cryptocurrencies is lower
MARKET FACTORS
Canada’s population is aging
Figure 9: Canadian population, by age, 2016
Canada will become increasingly diverse
Growth in smartphone ownership a boon for mobile banking
Financial concerns can lead to cautious spending habits
High participation in loyalty programs drives credit card ownership
Figure 10: Loyalty program participation, by industry, June 2017
Awareness of mobile payment high; cryptocurrencies is lower
Figure 11: Awareness and usage of digital tools related to payments, March 2017
KEY PLAYERS – WHAT YOU NEED TO KNOW
CIBC and PC Financial end partnership; CIBC to rebrand digital bank as Simplii
Equifax breach has a Canadian impact
China's Alibaba bringing online payment platform AliPay to Canada
Venmo testing physical debit card
PayPal debuts a credit card that offers 2% cash back
Apple’s new money transfer service Apple Pay Cash to launch in late fall 2017
Uber launches credit card
INDUSTRY DEVELOPMENTS AND INNOVATIONS
Canadian developments and innovations
CIBC and PC Financial end partnership; CIBC to rebrand digital bank as Simplii
Canadian startup STACK partners with MasterCard
China's Alibaba bringing online payment platform AliPay to Canada
RBC launches two new iOS payment options
Equifax breach has a Canadian impact
International developments and innovations
Venmo testing physical debit card
PayPal debuts a credit card that offers 2% cash back
Mobile wallet Curve launches 'time travel' tool to let you 'shop in the past'
Petal announces new credit card that does not require credit scores
Apple’s new money transfer service Apple Pay Cash to launch in late fall 2017
Samsung Pay expands in Canada with new partners
Uber launches credit card
MARKETING CAMPAIGNS
Interac gets consumers to open up to tapping
Figure 12: Interac – Open up to flash, September 2017
American Express targets Millennial life
Figure 13: The NEW American Express Cobalt Card – You Do You, September 2017
Selected campaigns from Mintel Comperemedia
RBC offers an Apple Watch or iPhone
Figure 14: RBC new customer gift, email advertisement, October 2017
BMO ATM’s make your life easier
Figure 15: BMO’s ATM email advertisement, October 2017
THE CONSUMER – WHAT YOU NEED TO KNOW
Credit and cash are the most popular payment methods
TD is the most popular choice for debit; TD & RBC are the leading issuers of credit cards
Awareness of debit rewards is not high
Around three in ten would prefer to use debit exclusively
Men over-55 more likely to exceed $2,000 in monthly spending
Younger women are particularly stressed about unpaid card balances
Young males more willing to pay a higher fee for better credit rewards
PAYMENT METHODS USED
Credit and cash are the most popular payment methods
Figure 16: Payment methods used, August 2017
Older Canadians more likely to prefer “traditional” payment methods
Figure 17: Payment methods used, 18-44s vs over-44s, August 2017
Women have different payment preferences
Figure 18: Payment methods used (select), men vs women, August 2017
Asian Canadians less likely to use debit
Figure 19: Payment methods used (select), Asian Canadians vs overall population, August 2017
CHOICE OF FINANCIAL INSTITUTION FOR DEBIT AND CREDIT CARDS
TD is the leading debit card issuer
Figure 20: Choice of FI for debit cards, August 2017
Desjardins is the leading debit card issuer in Quebec
Figure 21: Choice of FI for debit cards, Quebec vs overall population, August 2017
TD and RBC are the leading choices for credit cards
Figure 22: Choice of FI for credit cards, August 2017
PC Financial more popular among women, Amex among men
Figure 23: PC Financial and Amex credit cards, men vs women, August 2017
Regional differences are significant
Figure 24: Choice of FI for credit cards, Quebec vs overall population, August 2017
TD’s strength among 18-24s
DEBIT AND CREDIT CARD USAGE
Debit card usage
Over one third of 18-24s would prefer to use debit exclusively
Figure 25: Agreement with statements related to debit card usage, (% agree), August 2017
Younger consumers relatively more likely to use multiple debit cards
Figure 26: Agreement with statements related to debit card usage (% agree), men vs women, August 2017
Credit card usage
Three in five consumers prefer to use the card offered by their main FI
Figure 27: Agreement with statements about credit cards, August 2017
Men over-55 more likely to exceed $2,000 in monthly spending
Figure 28: “My average credit card monthly spend exceeds $2,000” (% agree), by age and gender, August 2017
Around a third of 18-34s have used a prepaid card
Younger consumers more likely to prefer debit
Figure 29: Agreement with select statements related to credit card usage (% agree), by age, August 2017
Older card holders more prolific and responsible users
Figure 30: Agreement with statements related to credit card usage (% agree), 18-44s vs over-45s, August 2017
Chinese Canadians are much more likely to prefer credit over debit cards
Figure 31: Agreement with select statements about credit card usage (% agree), Chinese Canadians vs overall population, August 2017
DEBIT AND CREDIT CARD REWARDS
Awareness of debit rewards is not high
Figure 32: Agreement with statements related to debit card rewards, (% agree), August 2017
Younger users more willing to pay more for better debit rewards
Figure 33: Agreement with statements related to debit card rewards (% agree), 18-44 vs over-45s, August 2017
Scotia debit customers are more aware of debit rewards
Figure 34: Agreement with statements related to debit card rewards (% agree), August 2017
Debit can be the starting point of a lifelong relationship
Young males more willing to pay a higher fee for better credit card rewards
Figure 35: Agreement with statements related to credit card rewards, August 2017
PC Financial customers are more “functional” users
Figure 36: Agreement with statements related to credit card rewards (% agree), August 2017
Around a third of PC Financial card customers have a “black” card
Figure 37: Agreement with statement related to credit card usage (% agree), Desjardins vs PC Financial credit card customers, August 2017
CREDIT CARD SPENDING AND SECURITY
Younger women are particularly stressed about unpaid card balances
Figure 38: Agreement with statements about credit cards, August 2017
Men are more interested in paying for balance protection insurance
Figure 39: Agreement with statements about credit cards, August 2017
Men and younger consumers more likely to be influenced by non-reward benefits
Around three in five consumers agree liability protection enhances safety
Figure 40: Agreement with statements about credit cards, August 2017
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Consumer survey data
Consumer qualitative research
Abbreviations and terms

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