Canadians increasingly relied on electronic payments, in particular contactless payments, but engaged in fewer transactions overall in 2020, according to a Payments Canada report.

The Canadian Payments Method and Trends report covers 20 billion payment transactions from 2020. Given the market restrictions that resulted from attempts to limit the spread of COVID-19, many of the headline results are not surprising.

Digital payments grew to 79 per cent of all transactions, while cash, cheque and paper payments declined, reflecting stay-at-home orders, temporarily or permanently closed bricks and mortar stores and concentrated effort to reduce face-to-face contact.

Online spending also grew, but overall spending declined. The decline in overall spending led to declines in both credit card use (down 11 per cent) and debit card use (down 9 per cent). Though credit and debit cards remain the two most-used payment methods, online transfers showed tremendous growth, increasing in use by 40 per cent for the second consecutive year.

Payments Canada Chief Strategy Officer Cyrielle Chiron said the sharp increases in contactless payment choices such as cards, phones and watches would likely continue. “There’s no doubt that these shifts in payment preferences are here to stay – and innovation will continue to evolve the payments landscape.”

Other key findings included:

• Contactless payments grew 13 per cent in volume and 10 per cent in value, due to virus transmission concerns and the increase of transaction limits to $250 from $100 by most networks.
• E-commerce transactions grew by 20 per cent.
• Use of card alternatives such as smart watches more than doubled. About 29 per cent of Canadians made a purchase using a mobile payment or digital wallet, 21 per cent used in-app purchases and 14 per cent made purchases using gaming consoles or Internet of Things devices.
• Cash and cheque payments continued to decline. Cash payments fell by 17 per cent, and now account for 17 per cent of total payments volume. Cheque transaction volumes declined by 26 per cent, but the average transaction value increased, reflecting ongoing use of cheques for large value business payments, and less use for smaller value consumer transactions.