OAKVILLE, ON, Canada -- Mobile payments are already mainstream in Canada, with more than 50% of Canadian smartphone owners having used their phones to make payments, according to a new study published by Technology Strategies International Inc.
According to the report Canadian Payments Forecast 2013, the majority of mobile payments in Canada are transactions made remotely, including bill payments through mobile banking apps, as well as Internet-based payments.
"The incidence of in-store payments using mobile phones is very low," said Christie Christelis, president of the technology research firm. "But with the increasing penetration of contactless payment acceptance terminals, coupled with the proliferation of NFC-enabled phones, we expect that by 2017 there will be almost 3 million regular mobile-payment users in Canada."
The study found that consumer payments have grown modestly in the past year, but that all electronic forms of payment have been experiencing substantial growth. The main growth drivers in the Canadian market have been increasing personal expenditure on consumer goods and services, and the increasing penetration of electronic payments into strongholds previously reserved for cash and, to a lesser extent, checks.
The awareness of different contactless payment options available to consumers has jumped more than 20% in the past two years, according to the study.
"Canadians are becoming more familiar with contactless cards as a payment option and are using it more often," said Christelis. "As a result, contactless payments have already been effective in displacing cash transactions, and we expect this displacement to become much more significant over the next five years."
The study predicts that by 2017, more than 50% of the smartphones in Canada will be NFC-enabled. The prepaid card market is expected to expand rapidly, with e-gift cards becoming more popular. Cash is expected to lose its position as the most frequently used form of payment in Canada over the next five years.