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Canadian Payments Forecast - 2012
Technology Strategies International, April 2012, Pages: 116
Canadian Payments Forecast - 2012, is an authoritative and independent strategic review, analysis and market forecast on Canada's consumer payments industry. This annual update provides in-depth analysis of the trends influencing the payments industry, and provides forecasts for all major consumer payment types, including emerging payment mechanisms such as contactless, mobile and online payments.
Key questions answered in Canadian Payments Forecast, 2012 include:
- What is the prognosis for cash, cheques and traditional electronic payment instruments?
- To what extent have contactless payments gained traction in the Canadian market, and how is the Canadian contactless market likely to develop?
- How will the mobile payments market develop in Canada over the next five years?
- How important is the gift card market in Canada?
- Is there life in the alternative payments market in Canada, and how will this market evolve?
- How has the cross-border debit market advanced in Canada and will it continue to experience high growth?
- How is the regulatory environment in the payments industry likely to develop in the wake of the Payment Systems Review Task Force and other industry initiatives, and what will be the impact on the industry?
Canadian Payments Forecast, 2012 identifies high growth segments in the Canadian payments market in the context of important trends, and developments in the economy and payments industry. Detailed five-year forecasts are presented on consumer payments and related acceptance infrastructure. Prospects for mobile payments in the Canadian marketplace are analyzed in-depth.
The 116 page report provides a comprehensive review, analysis and forecast of consumer payments in Canada. It identifies high growth segments in the Canadian payments market in the context of some important recent developments in the economy and the industry. Detailed forecasts are presented for credit card payments, debit card payments, cash payments, cheque payments, contactless payments, open-loop prepaid cards, closed-loop gift cards, cross-border debit payments, online payments, ABM installations and POS terminals.
Objectives of the Study
A Note on Forecasts
THE CANADIAN ECONOMIC CONTEXT
Personal Expenditure on Goods and Services
Retail Sales in Canada
PAYMENTS IN CANADA
Debit Card Payments
Credit Card Payments
Card Issuance and Circulation
Cardholder Acquisition and Churn
Merchant Acceptance of Credit Cards
The Prepaid and Gift Card Markets
Open-Loop Prepaid/Gift Cards
Closed-Loop Gift Cards
Online Payments and Transfers
Mobile Payments in Canada
Contactless Payments in Canada
Canadian Consumer Payments in Perspective
KEY DEVELOPMENTS IN THE CANADIAN PAYMENTS INDUSTRY
Credit Card Fraud
Debit Card Fraud
Payments System Review Task Force
The Competition Tribunal Case
PROSPECTS FOR CONSUMER PAYMENTS IN CANADA
Prospects for the Canadian Economy
The Outlook for Gross Domestic Product
Personal Expenditure on Goods and Services
ABM Equipment and Transaction Forecast
Cash Payments Forecast
Cheque Payments Forecast
Debit Card Payments Forecast
Credit Card Payments Forecast
Prepaid Cards and Gift Cards
Cross-Border Debit Forecast
Online Payments Forecast
Contactless Payments Forecast
Prospects for Mobile Payments
Payment Forecasts in Context
List of Figures
Annual Change in GDP (1983 – 2011)
Components of Personal Consumer Expenditure (2011)
Annual Change in GDP and PCE (1983 – 2011)
Personal Consumption Expenditure as a Percentage of GDP (1982 – 2011)
Annual Change in Components of PCE (2004 – 2011)
Nominal Growth in Retail Sales and GDP (2000 – 2011)
Canadian Retail Sales by Sector (2011)
Growth in Retail Trade by Segment (2006 – 2011)
Canadian Banknotes and Coin in Circulation (2000 – 2011)
Number of ABM's in Canada, by Ownership (2000 – 2011)
Volume and Value of Cash Withdrawals at ABM's In Canada (2000 – 2011)
Cash Available for Consumer Payment Transactions (2000 – 2011)
Cash-based Retail Payment Transaction Volumes in Canada (2000 – 2011)
Volume and Value of Cheques Cleared through the ACSS in Canada (2000 – 2011)
Volume and Value of Personal Cheques Cleared through the ACSS in Canada (2000 – 2011)
Number of Interac Direct Payment Monthly Users (1992 – 2011)
Volume and Value of Interac Debit Transactions (2000 – 2011)
Number of Merchants and Terminals Accepting Interac Debit Payments (2000 – 2011)
Canadian Travellers to the USA vs. USD/CAD Exchange Rate (2000 – 2011)
Cross-Border Debit Transactions by Canadian Travellers to the USA (2004 – 2011)
Foreign Travellers to Canada (2000 – 2011)
Travellers from China to Canada (2000 – 2011)
Number of Credit Cards in Circulation in Canada (2011)
Number of Visa and MasterCard Credit Cards Issued in Canada (2000 – 2011)
Annual Volume and Value of Visa/MasterCard Credit Card Transactions (1996 – 2011)
Visa/MasterCard Credit Cash Advance Dollar Volumes (2000 – 2011)
Visa/MasterCard Credit Card Transaction Volumes and Net Retail Dollar Volume (1977 – 2011)
Proportion of Active Visa and MasterCard Credit Cards in Circulation (1985 – 2011)
Comparison of Major Credit Card Activity in Canada (2011)
Channels of Awareness for a New Credit Card (2011)
Distribution Channel for New Card Applications (2011)
Canadian Credit Card Loans (1998 – 2011)
Number of Merchant Outlets Accepting Visa or MasterCard (1996 – 2011)
Canadian Prepaid/Gift Card Market (2006 – 2011)
Open-Loop Gift Card Market (2011)
Share of Redeemed Value by Retailer Type – Closed-Loop Gifts Cards (2011)
Average Spend per Closed-Loop Gift Card by Category (2010)
Average Percentage Spent Over the Value of the Gift Card (2010)
Average Number of Weeks to Gift Card Redemption by Merchant Category (2010)
Transfers and Bill Payment by Delivery Channel (2002 – 2011)
Share of Transfer and Bill Payment by Delivery Channel (2002 – 2011)
Growth by Delivery Channel and Transaction Type (2006 – 2011)
Canadian Online Orders (2010)
Payment methods Used for Online Orders (2010)
Value and Volume of Online Purchase Payments in Canada (2001 – 2011)
Number of Interac Online Merchants by Category (2009 and 2011)
Mobile Phone Penetration in Canada (2000 – 2011)
Number of Mobile Phone Subscribers in Canada (2000 – 2011)
Contactless Payments Cards and Terminals (2007 – 2011)
Contactless Payments Values and Volumes (2007 – 2011)
Share of Value of Paper vs. Electronic Transactions Flowing through the ACSS – Value (1990 – 2011)
Share of Volume Paper vs. Electronic Transactions Flowing through the ACSS – Volume (1990 – 2011)
Share of Value of Personal Consumption Expenditure by Payment Type (2001 – 2011)
Number of Payment Transactions by Payment Instrument (2001 – 2011)
Breakdown of Credit Card Fraud by Type (2010)
Growth in Value of Credit Card Fraud by Type (2005 – 2010; 2009 – 2010)
Debit Card Fraud in Canada (2002 – 2011)
Face Value of Counterfeit Notes Detected (1996 – 2011)
Forecast Real Growth in Canadian GDP (2012 – 2016)
Canadian Consumer Confidence Index (2006-2012)
Forecast Real Growth in Canadian GDP and PCE (2012 – 2016)
Forecast Number of ABM's in Canada (2012 – 2016)
Forecast Volume and Value of Cash Withdrawals at ABM's in Canada (2012 – 2016)
Forecast of Cash-based Retail Payment Transaction volumes in Canada (2012 – 2016)
Forecast Volume and Value of Personal Cheques Cleared through the ACSS in Canada (2012 – 2016)
Forecast Number of Interac Debit Monthly Users (2012 – 2016)
Forecast Number of Merchants and Terminals Accepting Interac Debit Payments (2012 – 2016)
Forecast Volume and Value of Interac Debit Transactions (2012 – 2016)
Forecast Number of Credit Cards in Circulation and Number of Active Cards (2012 – 2016)
Forecast Number of Merchant Outlets Accepting Visa and MasterCard (2012 – 2016)
Forecast Volume and Value of Visa/MasterCard Credit Card Transactions (2012 – 2016)
Forecast Value redeemed on Open-Loop Prepaid and Closed-Loop Gift Cards (2012 – 2016)
Forecast Cross-Border Debit Transactions by Canadian Travellers to the USA (2012 – 2016)
Forecast Value and Volume of Online Purchase Payments in Canada (2012 – 2016)
Forecast Credit Card and Alternative Payments for Online Purchases (2012 – 2016)
Forecast Contactless Payment Cards and Terminals (2012 – 2016)
Forecast Contactless Payment Values and Volumes (2012 – 2016)
Smartphone Market Share by Operating System (December 2011)
Forecast NFC Handset Penetration in Canada (2012 – 2016)
Forecast Share of Value of Personal Consumption Expenditure by Payment Type (2012 – 2016)
Forecast Number of Payment Transactions by Payment Instrument Type (2012 – 2016)
Forecast Annual Growth Rate for Different Payment Instruments (2011 – 2016)
Forecast Growth for Key Payment Segments (CAGR, %: 2011 – 2016)
List of Tables
Primary Issuers of Visa and MasterCard in Canada (2011)
Relative Shares of Major Credit Card Brands in Canada (2011)
Visa and MasterCard Acquirers in Canada (2011)
Online Orders in Canada (2010 and 2011)
Interac's EMV Migration Targets
Payments System Review Task Force Mandate
Payments System Review Task Force Recommendations
Task Force Recommendations: What's Likely to Happen?
Canadian Cash Threatened by Contactless and Mobile Payments
Contactless payments are rolling out rapidly in Canada, and are likely to account for significant transaction volumes and values by 2016, predicts Technology Strategies International (TSI). According to the recently released market research report entitled 'Canadian Payments Forecast - 2012', there is also strong interest in mobile payments (m-payments), although over the next few years this is likely to ride on the back of contactless rollout.
The study found that consumer payments have rallied after the recession and all electronic forms of payment were 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 (e-payments) into strongholds previously reserved for cash and, to a lesser extent, cheques.
"Cash, as a means of payment, is increasingly under threat," said Christie Christelis, president of TSI. "By 2016 we expect to see a substantial reduction in cash transaction volumes, mainly as a result of increased penetration of contactless payments in Canada - which includes mobile contactless payments.
"Cheques have all but floundered as a consumer payment instrument, and much of the consumer cheque payment repertoire has been substituted with online bill payments," he said. "Open-loop prepaid cards and closed loop-gift cards are also increasing in popularity, with strong growth predicted over the next five years."
The study found that the period of regulatory uncertainty in the Canadian payments industry is expected to continue for the next few years, inhibiting the innovation strategies of some key players.
"The Ministry of Finance's response to the Payments System Review Task Force recommendations was underwhelming," Christelis said, "with very little clear direction being given as to what the payments industry can expect in terms of regulatory oversight in the near future."
Some highlights from the study include:
- Contactless payments have continued to extend their reach over the past two years, achieving a substantial penetration level in appropriate payment settings. Interac's Flash is expected to make an impact in the next two years.
- Smartphone penetration is increasingly rapidly, and by 2016 almost 80% of the smartphones in Canada will be near field communication (NFC)-enabled, providing a solid foundation for the uptake of mobile contactless payments.
- The closed-loop gift card market is expected to expand rapidly, accounting for about C$5bn in redeemed value in 2016.
- Cash will remain the most frequently used form of payment in Canada over the next five years, but will suffer substantial erosion from contactless debit and credit payments.