The Coronavirus has drawn attention to how transactions happen at the grocery stores as well as take out restaurants. As more people are working from home as a precaution against COVID-19, it is all the more important to understand how contactless payment options, be it digital or cashless, will help keep the virus at bay not affecting the businesses at the same time.
For years, Canada has been moving closer to becoming a cashless society. In the most basic sense, this entails a continuous move toward more credit and debit card usage, and toward less reliance on cash. Recently, though, the move shows an increased reliance on technological advances. Contactless payments, in particular, are increasing dramatically, and have almost caught up to cash.
Cash Continues to Decline
Part of this story, of course, is that cash is quickly falling out of favor in Canada. As of 2019, only about 15% of Canadian consumers were paying regularly with cash. This represents a steep decline in the last decade, as more and more Canadians look to pay their everyday expenses with credit and debit cards. The convenience of not having to carry cash or make change gives electronic cards an advantage, particularly for higher value transactions. The trend has moved steadily away from cash since 2011 and shows no sign of slowing.
The Rise of Contactless Payments
As technology continues to develop, Canadian consumers show signs of rapid adoption. Contactless payments, in particular, reached over 4.1 billion transactions in 2018, up 30% from the prior year and over 97% from just two years prior. Instead of swiping or inserting, the convenience of simply waving a card or wireless device to pay has proven attractive. Contactless payments have now almost caught up with all cash payments in the country, and there is little reason to believe that will change soon.
Security Still Matters
One trend that may be interesting to watch is that contactless mobile payments have not risen quite as quickly as contactless payments on the whole. The focus here is on security, as not all believe contactless mobile payments to be a secure form of payment. As with other technological advances, more time, development, and messaging will likely boost this performance more, but it remains, for now, a slower growth segment within the overall boom for contactless payments.
Takeaway for Businesses
In Canada, relying on cash or even card-swiping payment systems looks increasingly like a self-limiting strategy. To grow your business, you should look to embrace advancing technology in the payment processing industry. Opening yourself to take contactless payments allows you to meet what has become an expectation for many of your potential customers.
Payment technology changes rapidly. To keep up, you should look to partner with a processing provider that develops with the technological world in which we live. In Canada, that means looking to adopt early and take new and developing forms of payments from your customers. Limiting your payment acceptance capabilities will only reduce your revenue potential, specifically in the midst of a pandemic like this.