The rise of mobile wallets in Canada

The Rise of Mobile Wallets in Canada

It’s no surprise that the COVID-19 pandemic has propelled electronic payment methods to unprecedented levels of adoption among Canadian consumers. However, despite the pandemic being a thing of the past, the momentum of electronic payment methods continues unabated. Prior to the pandemic, electronic methods (including direct transfer, wire payments, Interac e-Transfer, PayPal and mobile wallets) ranked lowest in terms of usage when compared to other methods within Canada. However, today they have surged ahead, securing the second position after credit cards and surpassing both debit cards and cash in popularity.

A spike in mobile wallet adoption

While electronic payments as a whole have been on the rise, however it’s specifically mobile wallets which have been experiencing staggering growth in more recent months.

In the last 6 months since June of 2023, RFI has seen the % of Canadian consumers using their mobile wallets at POS spike from 38% in H2-22 to an astounding 51% in H1-23, with almost all mobile wallet providers experiencing a significant increase in usage during that period.

Mobile wallets have also seen a significant hike as the default form of payments in apps as well, almost doubling from 14% in H2-22 to 26% in H1-23. Proving the rise of mobile wallets as a form of payment within the Canadian market is uniform across various payment channels rather than being confined to a specific one.

Not just adoption, but frequency too

While a heightened adoption is proof of Canadian consumers’ increased acceptance of mobile wallets as a form of payment, however a heightened frequency of usage tells us that Canadian consumers have moved even a step further and see mobile wallets as an integral and even a preferred form of payment for some. According to RFI’s latest data, 3-in-10 Canadian consumers who have used mobile wallets in the past, currently use this method on a daily basis, 33% higher than in H2-22.

The sharp surge in adoption coupled with the steady increase in usage frequency, confirm mobile wallets’ rising position as a go-to payment method for Canadian consumers.

There’s more growth to come..

Despite its remarkable growth in usage and frequency over the past 6 months, Canadians see themselves further increasing their usage of mobile wallets more than any other form of payment in the next 12 months. Signaling further growth for this rising electronic payment method over the next period.

It’s all about speed and convenience

While pandemic-triggered lockdowns forced consumers to find ways to shop and pay online as a form of survival, mobile wallet users today, mostly driven by choice rather than by circumstance, are predominantly driven by speed and convenience more than anything else.

So, what does this mean to banks and payment providers?

• Increased Competition from Non-Bank Players: With the rise of mobile payment platforms offered by technology companies like Apple, Google, and PayPal, banks face increased competition from non-bank players. These companies often provide seamless and user-friendly payment experiences, attracting customers away from traditional banking channels. Banks need to invest in technology and innovation to stay relevant and competitive.
• Customer Expectations: Mobile payments have raised customer expectations for convenience, speed, and security. Customers now expect seamless and instant payment experiences, which puts pressure on banks to improve their digital services. Financial institutions need to invest in user-friendly mobile banking apps, robust security measures, and efficient transaction processing to meet these expectations.
• Security and Fraud: As mobile payments become more prevalent, ensuring robust security measures is crucial. Banks and financial services providers must implement advanced authentication methods, encryption, and fraud detection systems to protect customers’ financial information. They need to stay vigilant and proactive in addressing emerging security threats and fraud risks associated with mobile payment transactions.

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About the Author

George Kawar is the Insights Director at RFI’s Toronto office and oversees the design, roll-out and delivery of consumer-focused syndicated research within the Canadian market. George has over 10-years of research and analysis experience within the fields of finance and technology & innovation and has dedicated his career to supporting the growth of tech startups and financial institutions through market research.