Canada

Payment methods in Canada

Internet usage in Canada is very high, although the E-commerce market is still relatively small. In 2017, Canadians spent 1,344$ US per capita online, compared to 18,727$ US per capita at brick-and-mortar shops. This should change within the next few years, on an average of 10% per year.

The m-commerce market is expected to grow even more - it’s expected to triple in about seven years. Between 2014 and 2016, weekly or daily shopping through a smartphone as more than doubled. Nevertheless, only a third of Canadian smartphone owners use them to shop.

Visa and MasterCard as main payment methods

The largest share of transactions at 64% are made through credit cards. Visa and MasterCard are used the most. Following card transactions, e-wallets and debit cards are also very commonly used. Mobile wallets were used to pay for 16% of e-commerce transactions in 2017 and 1% of point of sale transactions. In the next few years, credit card payments will lessen in favor of alternative payment methods such as bank transactions and e-wallets.

Credit card processing in Canada

Many payment gateways process credit card payments in Canada. Here are some examples:

Calgary-based Helcim offers an all-in-one merchant platform to Canadian and American businesses. Offered services notably include invoicing, recurring payments, point of sale and e-commerce solutions Its interchange-plus pricing model excludes early termination, monthly, setup and PCI compliance fees.

Moneris Solutions, based in Toronto, was founded by Royal Bank of Canada and the Bank of Montreal. They offers point of sale and online solutions to process debit and credit card payments. Gift and loyalty programs can also be put in place with this processor.

Square is well-suited for small businesses, charging no monthly fees for businesses processing less than 250 000 USD. Their tiny Square Reader devices, a key feature, allows merchants to accept payments in person. It is important to note that Square offers aggregated merchant accounts, rather than dedicated merchant accounts.

Peer-to-peer payment apps Canada

Mobile payment apps are increasingly popular as a way to send money between individuals. In Canada, peer-to-peer innovation was mostly led by its handful of major banks. Around the world, in contrast, startups usually led the discussion.

Interac e-transfer entered the market early on and secured itself a large share of it before any other non-bank alternative entered the market. The pan-national network Interac was created in 1984 as a cooperative venture among major Canadian financial institutions. Its being already well installed in the consumers’ habit facilitated the popularization of its e-transfer service.

Other popular payment methods

Instadebit is a secure online payment method which is often used to pay purchases through online banking. Interac Online is another very secure method of payment in Canada. It allows customers can make purchases on the Internet and transfer the money directly from their bank account. No financial information is shared with the dealer, making the debiting more secure. Additionally, prepaid cards are often used.

United States – First trading partner

The most common reasons leading Canadian consumers to buy abroad are cheaper prices and a better product offer. 45% of online purchases are made in foreign shops. One third of which is spent in the USA, the remaining 60% being shared between Europe and Asia.

Online Fraud Prevention in Canada

Just like in other countries, the growth of E-commerce is also increasing the fraud risk. Canada began to introduce the EMV chip and PIN as early as 2008. Fraud was then causing 512.2 million USD in damages. Damages have since been reduced to 465.1 million USD in 2013.

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