Canadian Cards and Payments Market: Future Trends

Technological Advancements and Digital Transformation

Visa, PayPal, and Shopify are driving technological advancements and digital transformation in the Canadian cards and payments market through innovations in digital identity, generative AI, frictionless consumer experiences, and product enhancements, ensuring robust growth and revolutionizing commerce.

"Visa invites industry leaders to its annual Payments Forum to set agenda for the future of commerce Digital Identity and Generative AI (Gen AI) take center stage at San Francisco's Moscone Center New innovations close the gap between in-person and digital commerce experiences The way people pay and get paid has changed more in the past five years than in the last 50." --- (Visa, press release, 2024/05/15)

"The first is accelerating innovation and ensuring that we’ve got best-in-class innovation, whether that’s on the consumer side and ensuring that our customers have a frictionless, incredible experience in checkout, to an unbranded side where we allow our merchants to have, again, best processing available, so really accelerating the velocity of our innovation." --- (PayPal, earning call, 2024/Q1)

"Our merchant first focus on product innovation combined with our enhanced go to market drove an incredible amount of solutions and enhancements in 2023.The continued success of our existing products coupled with our product innovation engine means that we now have even more avenues for robust durable growth." --- (Shopify, event transcript, 2024/06/04)

"Consumers have evolved, adapting to new payment experiences – from the advent of embedded, digital commerce to the rapid adoption of 'the tap.' Today at the annual Visa Payments Forum in San Francisco, Visa (NYSE:V) unveiled new products and services that will revolutionize the card and address the future needs of businesses, merchants and consumers and the financial institutions that serve them." --- (Visa, press release, 2024/05/16)

"As we execute our mission to revolutionize commerce globally, Srini’s experience leading technology, digital transformation, and AI personalization from inside some of our largest customers and partners will be invaluable. I'm thrilled to have Srini join the PayPal team! https://t.co/cVjcP8adla" --- (PYPL, Twitter, 2024/06/20)

Changes in Consumer Behavior

Consumer behavior in the Canadian cards and payments market is evolving, with Mastercard noting significant transaction opportunities driven by these changes. However, Visa reports no meaningful shifts across segments, though they acknowledge positive trends. PayPal focuses on enhancing consumer preference and engagement, indicating a strategic response to these behavioral shifts.

"So there's tremendous transaction opportunity driven by change in behaviors of consumers." --- (MA, earning call, 2024/Q1)

"Our data does not indicate any meaningful behavior change across consumer segments." --- (V, earning call, 2024/Q2)

"For consumers, we are focused on extending our leadership in consumer preference, increasing the share of checkout, and driving more frequent engagement from our consumers." --- (PYPL, earning call, 2024/Q2)

"That's the first thing I would say.When I come back to the times of COVID, it was -- there was a large set of economies in Europe that were lagging, I would argue on the digitization front, changing behaviors to consumers have increased the pressure to digitize further, and it has happened." --- (MA, earning call, 2024/Q2)

"We've got the cards in place. The consumer behavior is coming along nicely." --- (V, conference, 2024/05/21)

Emerging Payment Methods

Mastercard emphasizes the importance of understanding emerging technologies and customer interests, while Visa highlights the growing popularity of installment payments, projected to account for a significant portion of e-commerce transactions by 2026. PayPal is seeing increased adoption of its Complete Payments solution, and both Big Tech and FinTech are recognized as major opportunities in the evolving payments landscape.

"It's not so clear yet in the world of counter account payments. Nevertheless, it's our role as an ecosystem custodian to understand where emerging technologies are going, whereas customer interest going that consumers want to use their data footprint to get better services, well, absolutely.First of all, that starts with data protection and data consent management, which we invest a lot of energy on." --- (MA, earning call, 2024/Q2)

"According to Visa research, more than half of Canadians (58%)1 are interested in using installments and it is projected that by 2026, this payment method is expected to account for nearly one-quarter of all global e-commerce transactions2." --- (V, press release, 2024/06/27)

"As of the end of the first quarter, approximately 7% of our SMB volume is already on PayPal Complete Payments, with our team focused on distribution through partners that can accelerate adoption to the largest number of customers." --- (PayPal, earning call, 2024/Q1)

"And the strong payments drivers helped fuel services growth. That, coupled with strong demand drove 19% value-add services and solutions net revenue growth in the second quarter on a year-over-year currency neutral basis, this is our powerful flywheel turning.I'm excited about our momentum and the future potential whether it's deepening penetration of existing customers, launching new capabilities or distributing our services in new ways and across new customer and transaction types." --- (Mastercard, earning call, 2024/Q2)

"Yes. Here too, I think Big Tech and FinTech remain a very big opportunity. If you go back 10 years ago, I think the narrative that was emerging as you started to see Big Tech enter into the financial services and commerce and payment space and you started to see FinTech really start to rise up, the narrative was that a lot" --- (Visa, conference, 2024/05/30)