A comprehensive analysis of the credit cards, payments, consumer banking and merchant acquirer market in Canada, with perceptive commentary on relevant data.
As both Open Banking and a new real-time payments infrastructure draw closer, this traditionally conservative market is set to undergo a drastic evolution in coming years, opening up opportunities for alternative payment activities.
For the first time, challengers and fintechs will be providing stiffer competition to the five-pillar establishment, some of whose members are already chasing alternative revenue streams engendered by Buy now, pay later and e-commerce developments.
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
As one would expect, Canada faces immense economic challenges because of the pandemic and the recent volatility in oil prices. The country fell into recession in mid-2020, although the economy is expected to return to growth in 2021.
When it comes to cards, Canada has a balanced and inclusive market, consisting of a competitive credit cards segment and a popular low-cost domestic debit scheme. The country boasts high card ownership and widespread acceptance rates.
Payment Cards Market
This payment cards market enjoys great consumer penetration and merchant acceptance. The average Canadian adult made 384 card purchase transactions in 2020, a year-on-year decrease of 7.6% attributable to Covid lockdown restrictions.
Mobile payments have been increasing in popularity but in common with many other advanced economies, adoption is hindered by consumer indifference. Providers struggle to incentivise consumers to switch to mobile when many see cards with contactless functionality as offering comparable convenience.
In common with markets around the world, Covid-19 has hurt the Canadian credit cards market. Following several years of sustained growth, credit card purchase volume shrank by 8% during 2020.
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, with the former leading the market on most metrics. 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 the Big Five: RBC (Royal Bank of Canada), TD (TorontoDominion 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 2020, a total of 83 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 90% of the market. The dominant quartet is 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 around $107 billion was spent with cards at online merchants in Canada in 2020.
Regulatory and Markets Information
In Canada, supervisory responsibility for the financial sector is divided between 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 primary and secondary source data and conduct in-depth interviews with senior industry executives and North American experts.
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