A new report by Payments Canada has revealed that over half of Canadians (53 percent) abandon a purchase when checking out at a retailer or service provider if their preferred method of payment isn’t available to them.
The report, “Payments Pulse Survey: Consumer Edition,” follows a two-phase study conducted by Payments Canada and Leger Marketing Inc. between April 2 and June 11. Payments Canada and Leger Marketing Inc. surveyed 1,501 Canadians during Phase One of the study and surveyed 1,539 Canadians during Phase Two. Phase One consisted of a pulse check on trends spotted in Payments Canada’s 2017 survey, while Phase 2 looked at the specific needs of consumers.
“With record levels of overseas travel, many Canadians are getting a taste for new, more convenient digital payment platforms and are expecting to see these technologies roll out in Canada as well.”
– Gerry Gaetz, CEO of Payments Canada
Asked specifically what friction causes 53 percent of Canadians to abandon a purchase at the point of checkout, Payments Canada COO Justin Ferrabee named a number of factors for both ecommerce stores and bricks-and-mortar. Ferrabee said online, customers may get frustrated with long loading times, while bricks-and-mortar stores don’t always offer newer payment methods.
Interestingly, though, Ferrabee said that this 53 percent loss is also related to transitioning to digital. Some in-store retailers are becoming cashless, leading to frustration from customers who still prefer the physical currency. “Our interpretation is that this transition isn’t months, but years. [The] move to digitization is happening, and were seeing uptick and people that haven’t caught up to it.”
Still, the report said that consumers are increasingly looking for payment methods that cause less friction and less inconvenience, as 43 percent of Canadians said they are interested in invisible or non-checkout payments in store. The report also indicated that one-third of Canadians are attracted to payment technologies such as Amazon Go, and social networking apps such as AliPay and WeChat Pay.
“The high abandonment rates at checkout suggest there is a high cost of not integrating faster, more convenient payment technologies,” said Gerry Gaetz, president and CEO of Payments Canada. “Canadian consumers are speaking with their wallets, indicating that they will not buy from those businesses that don’t make the payment experience easy.”
According to Payments Canada, 96 percent of Canadians find depositing a cheque using a camera and mobile app inconvenient. Additionally, 49 percent of Canadians living in urban neighbourhoods, 42 percent of Canadians living in suburban areas, and 31 percent of Canadians living in rural neighbourhoods are more interested in processing payments invisibly.
The report indicated 70 percent of Canadians who have an e-wallet such as Apple Pay have used this type of payment method at least once since its launch in Canada.
When it comes to Canadian consumers’ confidence in digital payment methods, the report found that four in 10 Canadians store their personal credit card information on mobile apps and online ecommerce sites. Eighty-six percent of Canadian sfeel confident that the app or service provider they use will ensure they privacy and security of their personal credit card information.
“With record levels of overseas travel, many Canadians are getting a taste for new, more convenient digital payment platforms and are expecting to see these technologies roll out in Canada as well,” said Gaetz. “Fortunately, we are working with Canadian financial institutions and key government stakeholders to design and implement new payment systems, rules and standards that will make it possible to introduce faster, safer and more data-rich payment options for Canada’s businesses and consumers.”
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