A recent survey conducted with consumers in Canada finds that contactless transactions are conducted just as frequently with credit cards as debit cards, with the convenience factor winning out over the payment type:
Contactless payment transaction volume is soaring in Canada to the point where total credit card transaction volume is edging out debit card transactions for the first time because many consumers are using credit cards to tap and pay.
The difference is slight—6.047 billion credit card transactions were conducted in Canada in 2018 compared with 6.042 billion debit card transactions, according Technology Strategies International, a Toronto-based payments research firm. TSI based its research on the public statistics plus a survey conducted among 2,000 Canadian consumers.
Momentum has shifted significantly with the rise of small-ticket contactless payments linked to credit cards, and last year marked the first time credit card transaction volume has exceeded debit card transactions since 1997, when Canada’s Interac national debit scheme began to see strong gains in payments volume, TSI said.
Contactless card usage has been accelerating in Canada for several years, and the majority of transactions in the U.K. and Australia are conducted using tap and pay technology. This year several major U.S. banks including Bank of America and Chase are rolling out contactless credit and debit cards, as several major U.S. transit authorities recently opened their turnstiles to contactless payment technology.
This survey measured contactless card use, not mobile contactless, but it does bring to mind the impact that contactless card use might have on future mobile point-of-sale (POS) activity. So far, mobile use at the POS is low:
With more people in North America using physical contactless cards for everyday purchases, the potential effect on NFC mobile payments is not yet clear.
“Mobile payments currently make a very small contribution to the growth differential between credit and debit card transactions, but mobile will be an important battleground for Interac to win if it wants to regain some ground and position itself for the future,” said Christie Christelis, TSI’s president, in a release.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group
