Electronic Payments Now Deeply Ingrained Into Most Canadians’ Lives
Majority of Cardholders Say Cards Enhance their Consumer Choices
Toronto, November 7, 2005
For the vast majority of Canadians, electronic payments have become a deeply ingrained part of daily life, according to research released today by MasterCard Canada at its Financial and Payment Services Leadership Summit in Toronto. The Summit is examining the role and future of electronic payments – transactions made using networks to connect buyer, seller and financial institutions such as credit cards, debit, stored value, prepaid and other payment methods.
Credit card ownership is widespread with 79 percent of adult Canadians owning a card, according to research conducted by the Environics Research Group for MasterCard Canada. Those cardholders have reached a point of high comfort and familiarity with the product with 80 percent of cardholders saying they have a high degree of trust when using their credit card.
Cardholders also rely on the product to facilitate many of their day-to-day purchases to the point that 62 percent of cardholders say they would feel constrained in their choices as a consumer if they did not have access to their credit card and 72 percent consider it an important financial tool. A significant minority (16 percent) have actually left a merchant without making a purchase because the merchant did not accept credit cards.
"What began as a special occasion payment option has evolved over the decades to become a mainstream payment tool which Canadians expect to be widely accepted and totally reliable 24/7," said Kevin Stanton, President, MasterCard Canada. "As a result, the electronic payments networks now carry billions of dollars in Canadian commerce and many sectors rely heavily on them to enable their businesses – such as e-merchants, travel, enterprise B2B purchasing, among many more. Where once the railways were the critical networks connecting buyers and sellers, now electronic payment systems make those vital links."
The vast majority of Canadians (84 percent) believe that credit cards make certain transactions like booking a vacation much easier than in the past. They also recognize the value that electronic payments have contributed with 67 percent agreeing that the growth of electronic payments has been good for the Canadian economy.
Cardholders also have become increasingly sophisticated in their use of credit cards. More than one quarter (28 percent) have tried to put as many of their purchases as possible on their card in order to better track and manage finances and 24 percent have deliberately put purchases on their card in case they need to return the item.
"With electronic payments so incorporated into daily commerce, the role of the industry becomes one of management, facilitation and anticipation of needs,"; said Stanton. "The preferences and behaviours of consumers and merchants are significant drivers. We have to listen carefully to the marketplace to understand what they need and how they want to use our products and services to make their lives easier and to support their businesses."
The Environics Research Group research also found a significant gap between cardholders and non-cardholders. For the 21 percent of Canadians who do not own a credit card, some feel that certain transactions are more difficult. Four in 10 (40 percent) of non-cardholders feel they would have more choice as a consumer if they had a card, and more than one third (36 percent) would find it easier to make regular transactions.
"For some of these non-cardholders a credit-based product may not be appropriate but another payment option like a prepaid or debit card would allow them to access the benefits and convenience of the electronic payment system," said Stanton.
The Financial and Payment Services Leadership Summit, presented by MasterCard Canada and SourceMedia Conferences & Exhibitions, is the first conference of its kind in Canada examining strategic issues related to the payments industry in Canada.
"The payments sector is moving into a period of rapid evolution and expansion," commented Stanton. "The Summit provides a venue for consideration of the impacts of that evolution, especially on a marketplace where electronic payments are so deeply ingrained and vital." In the months and years ahead, Canada will see the introduction of new electronic payment devices and features including contactless payment, multi-application chip cards, prepaid devices and more.
About MasterCard International
MasterCard International is a leading global payments solutions company that provides a broad variety of innovative services in support of our global members' credit, deposit access, electronic cash, business-to-business and related payment programs. MasterCard, through its principal operating subsidiary, MasterCard International Incorporated, manages a family of well-known, widely accepted payment card brands including MasterCard®, Maestro® and Cirrus® and serves financial institutions, consumers and businesses in over 210 countries and territories. The MasterCard award-winning Priceless® advertising campaign is now seen in 105 countries and in 48 languages, giving the MasterCard brand a truly global reach and scope. For more information go to www.mastercardinternational.com
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*About the research:
The national survey of 1,001 adults Canada was carried out by telephone between October 13-20th, 2005 by Environics Research Group on behalf of MasterCard Canada. Results are considered accurate to within plus or minus 3.1 percent, 19 times out of 20.