The world of payments continues to witness rapid innovations that are both a challenge and an opportunity for financial institutions. The adoption of mobile payments, provided by both financial and non-financial institutions, is the single biggest change in the payments world since the advent of online banking almost 20 years ago.

Canada is one of the world leaders in the adoption of cashless payments according to MasterCard’s 2013 Cashless study. Some traditional payment methods such as cheques are in decline whereas others such as credit cards remain popular and new card offerings continue to proliferate. The advent of non-traditional players and new payment methods such as Apple Pay makes it imperative for banks to stay on top of these advancements in order to retain their competitive edge.

This report covers various payment methods in Canada, payment actions, interest in mobile banking features and functionalities, fraud activity and attitudes towards payment processes.

The report does not include customer service enquiries or phone interactions.

Contactless payment systems are credit cards and debit cards or other devices that use radio-frequency identification for making secure payments. The embedded chip and antenna enable consumers to wave their card or fob over a reader at the point of sale. This includes Visa payWave and MasterCard’s PayPass.

“Mobile payments” refers to using a mobile device, such as a cellular telephone, a smartphone or a tablet to pay for something at a store, online or from another person.

A mobile wallet is a software application on a mobile device that functions as a digital container for payment cards, tickets, loyalty cards, receipts, vouchers and other items that might be found in a conventional wallet.

NFC is a short-wave wireless radio technology that is used for making mobile payments at point-of-sale terminals. This technology is also used by contactless cards (tap and go) including Visa payWave and MasterCard’s PayPass.

Consumers making payments through a store app. Purchases are usually tied to a credit card or PayPal account. If the merchant does not have a dedicated app, the consumer can use their mobile web browser (similar to online shopping).

Sending money to or receiving money from another person either using a mobile phone number or an email address.

QR code is a machine-readable, two-dimensional barcode displayed in an app that can be scanned at a point-of-sale terminal (eg Starbucks app). As an example, the code is linked to a Starbucks account and funds are debited with each purchase. This technology does not require an NFC-enabled device.