A comprehensive overview of the credit cards, payments and merchant acquirer market in Canada, with clear-sighted commentary backed by relevant data.
A real-time payments infrastructure is due in 2022, and an Open Banking framework is currently being prepared. Mindful of growing competition from new methods, Visa and Mastercard are reducing average interchange to 1.4 per cent in mid-2020, having kept the weighted rate at 1.5 per cent for the preceding five years. The merchant acquiring market in Canada is relatively concentrated, with the top four acquirers sharing over 80 per cent of the market but the global trend to industry consolidation in this sector is changing the landscape.
Canada Country Report
Demographics and the economy
Key retail banks and issuers
Acquiring and processing
Regulatory and other cards market information
Appendices: Card Payments Data
Appendix I: Demographics and the economy
Appendix II: Payments environment
Appendix III: Cards market
Appendix IV: Mobile payments
Appendix V: Profit pool
Appendix VI: The card networks
Appendix VII: Key retail banks and issuers
Appendix VIII: Acquiring and processing
Appendix IX: Online acquiring
Demographics and Economy:
Trade comprises two-thirds of gross domestic product, making it one of the most trade-dependent countries in the world. Almost three-quarters of all trade takes place exclusively with the United States, making the economy extremely dependent upon its southern neighbour.
Canada has an advanced payments market with high levels of card usage. In common with other developed countries, cash use is declining, and digital payments are growing in popularity.
Card penetration levels are high with virtually all adults holding a debit card and nine in ten a credit card. At the end of 2019, there were an estimated 60 million credit cards and 47 million debit cards in circulation for an adult population of 31.6 million.
Proximity mobile payments in Canada are dominated by the three global 'Pays' offered by Apple, Google and Samsung. A small but growing proportion of contactless payments are made through mobile devices.
As is the case in many markets globally, issuer portfolios in Canada have gradually shifted towards less risky portfolios in the last decade, with growth in spend per card and stability in rollover rate.
Canada's credit cards market is represented in the main by three global brands: Visa, Mastercard and American Express. There has been stiff competition between Visa and Mastercard. The debit cards market is dominated by Canada's domestic debit network, Interac.
Key Retail Banks and Issuers:
The retail banking market in Canada is dominated by a Big Five: RBC (Royal Bank of Canada), TD (Toronto-Dominion Bank), Scotiabank, CIBC (Canadian Imperial Bank of Commerce) and BMO (Bank of Montreal). RBC is the largest in terms of total asset size. At the end of 2019, a total of 86 banks were operating in the country.
Acquiring and Processing:
The merchant acquiring market in Canada is relatively concentrated, with the top four acquirers sharing over 80% of the market. The dominant quartet are Moneris Solutions, Global Payments, Chase Merchant Services and TD Merchant Services.
Canada has a high internet penetration rate of over 90%, and the e-commerce market is constantly growing. Verisk Financial Research estimates that $82 billion was spent with cards at online merchants in Canada in 2019.
Regulatory and Markets Information:
In Canada, supervisory responsibility for the financial sector is divided among the federal government, provincial governments and national self- regulatory organisations.
Amex Bank of Canada
Bank of Canada
Bank of Montreal
Brault & Martineau
Canada Deposit Insurance Corporation
Canada Mortgage and Housing Corporation
Canadian Association of University Teachers
Canadian Bar Association
Canadian Federation of Independent Business
Canadian Imperial Bank of Commerce
Canadian Nurses' Association
Canadian Payments Association
Canadian Tire Bank
Canadian Tire Financial Services
Chase Merchant Services
Financial Consumer Agency of Canada
Financial Institutions Supervisory Committee
First Ontario Credit Union
Meridian Credit Union
National Bank of Canada
National Data Corporation
National Hockey League
Nova Information Systems
Office of the Superintendent of Financial Institutions
President's Choice Financial
Retail Council of Canada
Royal Bank of Canada
TD Merchant Services
University of Ottawa
University of Toronto
Verisk Financial Research reports deliver market and competitor intelligence on payments cards, e-money, acquiring/processing, retail banking, and consumer credit in North America. Researchers use both primary and secondary source data and conduct in-depth interviews with senior industry executives and North American experts.
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