Due to changes in customer preferences and technological improvements, the Canadian e-commerce landscape has seen considerable changes recently. Online payment alternatives have also undergone significant change, with credit cards, e-wallets, and other options competing for dominance. The market share of credit cards, e-wallets, and other payment methods in Canadian e-commerce from 2016 to 2022 are highlighted in this article’s analysis of the data, which offers insightful information about how Canadian customers’ payment preferences are changing.
Because they provide ease and security, credit cards have long been Canada’s top choice for online payments. Credit cards dominated the market in 2016 with a sizable 70% share. However, due to several causes, their supremacy has been gradually fading over time.
The rise in acceptance of alternative payment methods is one factor contributing to the drop in credit card usage. Customers had more alternatives catered to their interests as e-commerce platforms and merchants started to provide a greater variety of payment options. Some consumers stopped using credit cards because of the advent of e-wallets and debit cards, which offered them quicker and more convenient payment methods.
Concerns over cybersecurity and data breaches are becoming more prevalent, which is a big factor in the fall in credit card use. Consumer awareness of the significance of secure payment methods has increased because of high-profile cases involving identity theft and credit card data theft. As a result, some users have switched to e-wallets, which provide an additional level of protection through tokenization and encrypted transactions.
E-wallets, as opposed to credit cards, have steadily increased in popularity over time. These online payment systems give customers a quick and safe way to buy things online. E-wallets had a modest 12% market share in 2016; this percentage rose to 16% in 2017.
E-wallets grew even more in popularity in 2019, taking up 18% of the market. They represented 23% of Canadian e-commerce transactions by 2020, indicating a significant increase in use. E-wallets regained pace in 2022, gaining a 27% market share despite a little decline to 22% in 2021. Key factors in the success of e-wallets and other mobile payment options have been their ease of use and growing popularity.
Several reasons have contributed to the expansion of e-wallets. The ease of use and smooth user experience that e-wallets provide have struck a chord with consumers, encouraging them to embrace these online payment options. Second, it has emerged as a very desirable feature that enables users to manage their finances more effectively by enabling the storage of numerous payment methods on a single platform.
Technological improvements and shifting consumer preferences have had a significant impact on Canada’s e-commerce payment ecosystem throughout the years. Credit cards used to control the industry, but as their share has slowly decreased, e-wallets have grown in popularity and unexpectedly powerful competitors like debit cards have emerged.
Consumers now have a quick and secure substitute for conventional payment methods thanks to the steady growth of e-wallets. The fall in credit card use can be ascribed to a number of things, including the popularity of alternative payment methods, increased security concerns, and the convenience of e-wallets’ user interface.
E-wallets are anticipated to maintain their popularity in 2023 and continue to improve user experience, changing how Canadians engage in online transactions as the digital payment ecosystem continues to develop. They are positioned to play a key role in the development of digital finance due to their smooth integration into the e-commerce environment.
Sources:
https://www.statista.com/statistics/1230961/e-commerce-payment-methods-in-canada/
