And they can accomplish this goal by understanding what consumers want,

K E Y I N S I G H TS

2018 Canadian Consumer Payment Study

Six insights from our study: Every payments player wants to maintain a competitive edge.

integrating useful new technologies, maintaining a degree of personalized relationships and creating an exceptional customer experience throughout the purchase process.

1 Canadians continue to love their credit cards. For the fourth year in a row, consumers ranked credit cards as their No. 1 favorite payment method. In fact, this year, credit led in every category except for coffee shop purchases and payments to individuals. For the first time since our study began, consumers from all age groups and income levels said they prefer paying for purchases with credit cards. Sixty-seven percent of our respondents stated they have two or more credit cards, which makes it more important than ever to understand what motivates consumers to use one credit card over another. According to Payments Canada (https://www.payments.ca) Canadians are using credit for increasingly larger percentages of their monthly spending (“Canadian Payment Methods and Trends 2017”). With the rising popularity of credit, the percentage of consumers using debit cards and cash has decreased.

2 Consumers are ready for mobile. Although the use of mobile for payments is still relatively low, consumers expect to rely more on mobile payment options within the next couple of years. More than 50 percent of those surveyed said they are familiar with merchant apps, and 33 percent of those who are familiar with the merchant apps indicated they have already made a purchase in this manner. Currently, consumers’ top two uses for mobile are storing loyalty/rewards cards on their phones and viewing transactions instantly. Considering the number of consumers with smartphones and wireless services, it’s no surprise that all industries and companies are continuing to focus heavily on the digital landscape.

3 The top reason for using one card over another? Rewards. For the fifth year in a row, loyalty or rewards programs came in as the top influencer when consumers choose between multiple credit cards. Ninety percent of our respondents selected rewards as a feature that causes them to use one credit card over another. This sentiment was consistent across all age groups. Rewards are most often redeemed for merchandise, with cash-back coming in at a close second. Real-time rewards are gaining traction, with an increasing number of card issuers beginning to offer this option. Consumers said they would like to be able to use their loyalty and rewards points for immediate discounts when making a purchase.

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K E Y I N S I G H TS

2018 Canadian Consumer Payment Study

4 As technology evolves, consumer interest in new payment methods is growing. Over the last couple of years, person-to-person (P2P) services, which enable consumers to easily pay other individuals, have become easier to use and more widespread. Although cash continues be the preferred way to pay individuals, 55 percent of respondents indicated they have used a P2P service. Canadian consumers are also very familiar with contactless payments. More than 95 percent of respondents were aware of the capability, and 85 percent have used it. We also believe payment usage will increase for connected devices like ‘smart speakers’ (such as Amazon’s Echo, Apple Home Pod, etc.) as a larger percentage of them gain payment capabilities.

5 Consumers want to talk, especially if there’s a problem or an opportunity. Some 43 percent of our respondents felt it was important to have all of their accounts with the same financial institution. Most use the internet or mobile banking apps for regular interactions with their financial institution. However, a large percentage, 69 percent, still want to call customer service and talk to a representative if they have an issue with their card. When it comes to learning about new products and services, 83 percent of respondents were open to receiving marketing communications, although preferences around the frequency varied. New products and services that address identity theft and credit scores/ratings were what potentially interested consumers most.

6 Security matters, but consumers are not overly worried. The almost daily proliferation of news reports on security failures and data breaches prompted us to add questions this year to track consumer attitudes about the safety of their personal and financial information. While many respondents said they’d changed their passwords for email, online banking and retail websites (in addition to checking their credit reports for irregularities), 70 percent said they’re “not very” or only “somewhat” concerned about their data being stolen. This could be because the majority also believes the bank is responsible if their account or personal information is stolen and then used to make fraudulent purchases. They also seem to understand and are comfortable being asked for more information to verify their identities and to obtain new credit cards or loans.

Download the complete 2018 Canadian Consumer Payment Study at: http://www.tsys.com/2018canadianconsumerstudy