Canadians cautiously optimistic about financial outlook – but continue to tighten spending

While 56% say they continue to spend less overall since the onset of COVID-19 (on par with six months ago at 58%), nearly one in three (29%) believe they will be better off financially 12 months from now and 36% believe that Canada’s economy will be in better shape 12 months from now. A further 56% of Canadians expect to be in a similar financial situation in 12 months, and 37% believe the economy will be the same a year from now.

“While spending levels remain low, the new data infers that Canadians see a light at the end of the tunnel in terms of their financial well-being,” said Cyrielle Chiron, Chief Strategy Officer of Payments Canada. “Now, around 18 months since a state of emergency was declared in Canada, we continue to see the prevalence of a number of pandemic fuelled payments trends. At the core, Canadians’ concerns around the physical handling of cash and payments terminals has catapulted a shift towards digital and contactless payment preferences. We are also seeing increases in e-commerce use. While the pandemic may have accelerated these trends, the reality is that payments innovation continues to change the way we make transactions.”

The study provides a moment-in-time perspective on Canadian spending behaviours compared to pre-pandemic, and acts as a follow-up to prior study waves in May, September and December 2020. The new data points to the continuation of a number of payment trends observed through 2020, including:

Continued shift towards preference for contactless and digital payments

• 42% of Canadians say the pandemic has changed their payments preferences to digital and contactless for the long-term, consistent with six months ago.
• 57% say they are using cash less, compared to 53% six months prior.
• 35% are using cheques less, the same as six months ago.
• 42% are tapping their debit card and 43% are tapping their credit cards more against payment terminals, compared to 42% and 47% respectively six months prior.
• 32% tend to avoid shopping at places that don’t accept contactless, compared to 37% six months ago.
• 55% try to avoid going over the limit to enable contactless payments, compared to 54% six months prior.

Concern over physical handling for payments continues to be prevalent among Canadians

• 34% say they are uncomfortable handling cash, compared to 38% six months prior.
• 32% are uncomfortable when they have to touch a debit or credit card payment machine, down slightly from 37% six months prior.
• 38% are using online banking more than pre-pandemic.
• 68% are using ATMs less often than they used to, on par with six months prior at 67%.

While spending is down overall, Canadians continue to favour cards and e-transfers

• 35% are using credit cards more, compared to 33% six months prior.
• 19% state that they are using debit cards more, compared to 20% six months ago.
• 28% are using e-transfers more, versus 25% six months prior.

Canadians continue using e-commerce platform for more diverse purchases

• 50% are using e-commerce platforms to get different products more often than they used to, compared to 49% six months prior.
• Canadians report using e-commerce for more diverse purchases compared to pre-pandemic; the most prevalent increases in purchase categories include: clothes (52%); household items (43%); food and groceries (38%); health and beauty supplies (36%); electric appliances (27%), and pet food (18%).
• Dramatic increase in spend on food and delivery services continues
• 60% of Canadians report spending more on food than they did pre-pandemic, compared to 58% six months ago.
• 33% report using food delivery services more often, such as Uber Eats and Instacart, compared to 28% six month prior.
• More generally, 46% of Canadians are tipping more than they used to, compared to 40% six months ago.

Increase in preference for new payment channels, including wearables, home assistant smart devices, and social media channels

• Assuming they had the option to make payments from a wearable device such as a watch, fitness tracker or ring, 65% of Canadians said they would be using them either the same or more since the onset of the pandemic.
• 59% would be either the same or more likely to use a home assistant smart device, such as Alexa/ Google home or a TV, fridge, or car to make a payment.
• 60% are either the same or more comfortable sending money to a friend or family member using social media channels, such as WhatsApp, Messenger and TikTok.

Concern for fraud and cyber crime impacting payments behaviour and preferences – but Canadians have a high level of confidence that they are protected

• 50% of Canadians say that fraud and cyber crime concerns impact their payments preferences and behaviour.
• Even though they are conscious about fraud and cyber crime risks, 66% of Canadians feel protected by their bank, credit union, and/or credit card provider when it comes to making payments.