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December 21, 2020

Canadian spending habits have yet to return to pre-pandemic levels

By Evie Rusman

Payments Canada has released new data on Canadian payment trends since the onset of Covid-19, showing that Canadians continue to spend less overall, and are maintaining a digital-first mindset with continued preference for contactless payment methods. Mohamed Dabo writes

The study provides a moment-in-time perspective on Canadian spending behaviours compared to pre-Covid-19, and acts as a follow-up to the May 2020 study conducted during week five of the pandemic.

The new data indicates that a number of payment trends observed in May 2020 resulting from the pandemic continue, including: The increased use of electronic payments and e-commerce; a preference for contactless and online/mobile banking; and a decline in the use of cash and cheques.

Canadians report mixed sentiment around the permanency of these payment preferences.

Most Canadians continue to spend less than before the pandemic

Although approximately 34% of Canadians report they do not expect to return to using cash payments to the same extent as pre-Covid once the pandemic recedes, 31% of Canadians expect to use cash payments more often as the economy recovers, even though they have favoured using either digital or contactless payments since the onset of the pandemic.

“In this most recent research, about 60% of Canadians report that they continue to spend less than before the pandemic,” said Tracey Black, President and CEO, Payments Canada.

Key study findings:

Continued preference for contactless payments

Approximately 47% of Canadians surveyed report tapping their debit and credit cards more often than pre-Covid, compared to 53% at week five of the pandemic.

Forty per cent of Canadians report they are uncomfortable when they have to touch debit or credit card payment machines.

Thirty-six per cent of Canadians report avoiding shopping at places that do not accept contactless payments, down from 42% in week five. Additionally, 50% of Canadians tried not to exceed the contactless limit when buying something in-store, compared to 52% in week five.

Reduced handling of cash

When it comes to accessing money, 64% of Canadians are using ATMs less, an increase since week five of the pandemic, from 61%. And 42% of Canadians say they are uncomfortable handling cash in general.

Continued decline in use of cash, cheques and prepaid cards

Concerns of surface contact with cash and coins have continued to shift merchants and consumers away from cash payments.

Compared to pre-Covid use, 57% of Canadians report using cash less (compared to 65% in week five), 32% report using cheques less, and 32% report using prepaid cards less (down from 37%).

Canadians spending less overall, but using credit and debit cards and e-Transfer more

Around 61% of Canadians report spending less than pre-Covid-19, compared to 75% in week five of the pandemic.

Furthermore, 32% of Canadians report using credit cards more; 21% report using debit cards more; 25% report using e-transfer more. To note, these payment methods include those using tap and/or through e-commerce.

Leveraging e-commerce platforms

Just under half (48%) of Canadians are using e-commerce platforms more often than pre-pandemic. Commonly purchased items include clothes (47%), household items (46%), food and groceries (46%), and health and beauty products (35%).

Prioritising food delivery services and tipping more

When it comes to food delivery services, 29% of Canadians report using services such as Uber Eats and Instacart more often than pre-Covid-19 (up 3%). Lastly, 41% of Canadians reported tipping more (up 12%).

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